For what it is worth… I got the latest gaming services update just over an hour ago on my PC.
I was not enrolled in SU12 beta.
Marketplace detected and updated MSFS to SU12 and I have had no issues with launching the sim to the main menu.
A quick question, are you enrolled into the preview programme in insider hub for “Windows Gaming”? I know that can sometimes issue gaming serives updates that have caused issues with MSFS in the past.
I am not in that preview programme any longer. My latest gaming services update was to version 10.75.13001.0 (found under settings>apps>Installed apps>gaming services advanced options)
Maybe a reboot of the PC might help?