Experiences with the XBox App for PC (Not Game Bar) and connecting to XBox and PC users

I have the same issue, if I force quit the game bar and relaunch it then I invite someone who is a XBOX user it will work but if I add a PC user it does not work for them. Also, if I force quit the app and the xbox user invites me it does not work same
if the PC user invites me. The issue seems to be with the PC app.

Just to double check, is your Steam account connected to your Microsoft account?

Open game bar (Windows key + G) > Settings > Accounts > if yes, please unlink it temporarily. After that do the previous, but only the reset and repair thing with these apps:

Game Bar, Xbox App, Sea of thieves app.

Restart your PC, open game bar again and link your steam account. And finally try again .

By the way, the play option (the ones that redirect you to Steam) is the one inside the Xbox PC app?

If you're referring to the Xbox Game Bar on PC, it saves to your hard drive as default. If you go to the Settings app on your PC, click on 'Gaming', and then on the side bar, click on 'Captures'. That will show you where the Xbox Game Bar recordings and
screenshots are stored.

Xbox companion app is discontinued, and the "Party Invitations" and "Games" notification settings are nonexistent in the Xbox PC app. Settings for invites and messages are all on the Game Bar app for PC.

You'll just have to make sure these settings are checked after reinstalling the game bar @ (Game Bar)Settings>Notifications>Xbox Social>Notify me when I'm invited to a party or multiplayer game

It appears that the game bar is looking for the app on your PC. It doesn't go to cloud gaming anymore. I hope it is a bug in the Game Bar/Xbox app/