Well, I think I figured out that I have to login to the XBOX app and then 'install' to a console from there, then it seems to connect it. Thats all I can think of since the Microsoft / XBOX account shows the D2R purchase with active subscription, the bnet account I created and connected to XBOX (and is different from my existing PC install bnet account) also shows an active sub to D2R. The reason I think this is the problem is that the copy I am using is technically a copy from my PC, copied entirely over and associated with the second bnet account. It opens, works fine, but then I get one of two errors: the first told me I hadn't been online in over 30 days, and that has ceased since I opened/logged into the XBOX Online account and connected to bnet. Now I just get the "could not authenticate" error. There is nothing that specifically shows me that the PC install vs XBOX/console installs are coded differently or are somehow linked in this way, but I am at a loss otherwise.
So now I am left to find a cheap usable XBOX simply for a $40 game, borrow one to install and see if this then fixes the issue and 'activates' my copy, or beg Amazon for a refund on clearly marked non-refundable purchase.
Don't discount old consoles. I don't know which version you have, but there are some real banger titles on Xbox. Red Dead Redemption stands out as one of the best