Prepaid Xbox Live Gold wants to convert to ultimate, WHY?

It will be converted to Ultimate, but not at the full rate. After you've taken the $1 (or 1 local currency unit) offer that converts your prepaid memberships at parity (that is, one month for every prepaid month), subsequent prepaid cards will be redeemed
at a lower rate. You can find a conversion chart in the
FAQ on the Game Pass Ultimate page. But for quick reference, 24 months of Xbox Live Gold will be converted to 8 months of Ultimate.

so you're saying if I purchase a Xbox Live gold membership prepaid card for 12 months while Xbox Live Gold Pass ultimate is enabled it'll convert those 12 months into Xbox Live Gold pass ultimate

Hello ImGlob,

Thank you for posting on the Xbox forums. We understand that you are interested in learning if your Xbox Live Gold prepaid code will convert from 6 months to 2 months of

Xbox Game Pass Ultimate. Smwutches is correct in stating that the prepaid code will convert from 6 months of Xbox Live Gold to 79 days of Xbox Game Pass Ultimate. Smwutches is also correct in stating that you will need to redeem the prepaid code for Xbox
Live Gold after your Xbox Game Pass Ultimate subscription expires in order to get the full amount of Xbox Live Gold time from the prepaid code. We hope this information helps!

It will always convert any prepaid Xbox Live Gold time to Game Pass Ultimate time. Also any future added Gold Live or normal Game pass time.

I also feel the system is a little unfair, it should just start your gold subscription after your ultimate. You paid for 12 years of Gold, you deserve to get the 12 years unless the package you bought has a disclaimer stating it will be converted if you
have the UGP subscription. But thats just my opinion. So for now though conversions is what you have unless you cancel UGP subscriptions or wait til it’s over.