I talked to Xbox today. They said it is a license issue on Mojang side. They said they have seen this a lot lately and to fix it you have to contact Mojang with your transaction number and request an escalation to get them to reset your license permissions and that once done, it will work properly. They said this has been a successful fix for multiple people. Husband and I contacted Mojang, got a generic response, requested an escalation again and am waiting on a response once again. Will update here if this works.
My husband and I have our Xboxes set as each other's home so we can game share, but are still unable to play. It won't even show up in either of our home libraries, and after it updates, it says the main game isn't installed when you go to manage games and add ons, but in the Microsoft store it shows you own the game
Having this exact same issue as well, with no resolution from Mojang or from Xbox Support.
I HAVE A FIX!!!!
You need to request a call from Xbox support (game issues, game crashes, select phone call).
Tell them your order number and have them verify the order number you see is what they also see (mine was different on their side). Then ask them to complete troubleshooting steps on THEIR side.
Once THEY complete their troubleshooting steps, turn your Xbox off and unplug for 1 minute. This will fix the issue completely.
I was told the main issue was that the order numbers de-synced and so they were not showing up properly as being connected to my account.