Minecraft Launcher now shows 'Play Demo Option' with Active Xbox Game Pass

I have recently logged into my launcher to find that I cannot play Minecraft with my active Xbox Game Pass account. Instead of 'Play' , the launcher now says 'Play Demo Option'.

I have tried:
Resintalling minecraft

Redownloading Xbox Game App

Confirmed my subscription is still active.

Deleting %appdata% folders and reinstalling.