Joining a world locally while both players are signed into a Microsoft account does not let joining player join

When trying to join a local world, if both players are signed into a Xbox Live account, the player who is trying to join will get stuck on the "Connecting to multiplayer game" screen and eventually will get an error screen saying nothing but "an error occurred".

HOW TO REPRODUCE:

1. Connect to the exact same wireless WiFi.
2. Sign into separate Microsoft accounts on both devices.
3. Open a world on one device.
4. Attempt to join the world on the other.