I can't seem to get my second controller to work on my Xbox Series S and am getting really...

I bought the Xbox Series S and two controllers.

Whenever I try and play coop with my wife the second controller is not recognized with the exception of 1-2 games like "It Takes Two".

I've tried assigning said second controller to a guest profile "profile(1)" and to a whole new profile my wife created... let's call it "wife_profile". Note that all three profiles are signed in as per the Profile and system page - I see the main profile, and under Sign Out I see "2 profiles, 1 guest."

For an example the behavior when trying to sign up player 2 in Gears of War 4 today is shown below - same regardless of which profile was assigned to the second controller:

1. When pressing the menu button on the second controller as instructed by the game nothing happens. However screenshots do seem to happen and the home button does work.
   
2. When we go to the devices page, we can see that the controllers are appropriately assigned BUT when I test the buttons of controller A, the button presses on the second controller B can be seen on the screen.
   

Things I've tried to do

1. Full power cycles on both controllers and Xbox S

2. Factory reset of my Xbox

3. Installing games locally incase it was a cloud gaming issue

Now I'm at the end of my tether.

I've paid a lot of money for the Xbox to play with my wife and am also paying for gamepass.. What's the point if only 1-2 games can use both controllers?

Could use some help from the forum here.

:)