Ultimate account as home

The home console feature is meant for households with more than one console,it's not meant for sharing with your friends which can get you into trouble.

they have ultimate, they had core, then switched to ultimate later that day, and do we need to be each others home xbox for me to get xbox live then??? as in thier account on mine and my account as their home xbox

The ability to share is tied to the Home setting. So whether or not an account is the primary account wouldn't have an effect. If an account had a subscription, they can share the subscription on any console they have set as their Home. It sounds as though the account you have set as Home on your console maybe doesn't have a subscription to share and someone on the second console does, or the Home setting is not set correctly.

As far as sharing Ultimate, if an account shares Ultimate, the other accounts will get the ability to play online and can access the games downloaded from Game Pass. They do not all get the full benefits of Ultimate since they would not actually have an Ultimate subscription.

I believe that only one account can set a console to Home at a time. When you add the second one, it removes the first one. Try having ONLY the account with Ultimate set the console to Home. Do NOT set the second account to Home.
Just know that only the multiplayer permissions and access to the games library are the only aspects of Ultimate that can be shared. Cloud gaming and/or any other Ultimate perks are just for the account that actually purchased the subscription.

I'm having a problem where one account has Ultimate, the Xbox is set to home, yet no other account is able to use the functions of Ultimate.