Installing a disc game on a console with no disc reader

You would have to purchase it digitally (if available) in order to play it. It's not possible to use the disc on a disc-less console.

Based on what you have said it sounds like there is a problem with the disc reader on your console. You could try installing a game to your hard drive and then playing that game. This would eliminate the use of the disc reader and hopefully solve the problem
of games freezing. Hope this helps.

If the game is installed to the console then you would only need the disc in to prove ownership.

However, as was mentioned above the disc could harm the reader as it still needs to spin at the start to prove that it is the proper disc. It would be best to replace it.

Yes of course it could have been on the disc. Just like any copyright protection is. It doesn't even have to be manually activated. You install the game off the disc you can play the game without disc for as long as you want. You give that disc to a friend
and he tries to install it. Live would be pinging your console once every 24 hours so it would recognise that this disc has been installed already on a X1 console and reject the install. The retail end would have a disc reader that works the opposite of the
console by renewing that code or disc to be resold voiding the install that exists on the original owners console.

Where am I getting this info?

From the ms at e3 and and all the stories that described it and using knowledge of how to implement what they were talking about.

Just like banks give out card readers to retailers MS would have also provided game retailers the reader to operate the system for X1.

But still where are you getting your statement that under the original policy games could not be traded or sold?

This appears to be an issue related to this game bundle.

It's the one that comes with Outlander and From Dust as well, correct?

You should be able to install all disc games to your console, but for some reason, this bundle does not offer that option.

If the disc is faulty or the disc reader is having issues, the game will have slow downs.