Transfer license from box to digital

If you live in the US, physical Microsoft Stores used to run promotions where you could exchange your game discs for digital codes.

Otherwise, the only thing I could reccomend is selling the game and buying the digital copy

You cann't to change type of license

I would recommend selling the game or trade-in if they cant exchange it for a digital code for you in the Microsoft Store.

sell the dvd and buy the digital copy, thats all you can do

The license transfer tool is to transfer your licenses to another console in case you get a new console, not to transfer licenses between accounts. There is no way to transfer digital licenses to another account.