It’s possible they disabled it for Xbox, sorry. 
This is an Xbox bug. You will have to wait until it is fixed. It has been a pain for a while.
As long as your online settings are correct, you’ll see other planes.
What annoys me is that I cannot set some kind of geofence.
In other words: I’m not interrested in planes that are flying more than let’s say 50 miles away.
Have to say that I’m not sure if one can set it in the options pages since I pauzed using MSFS for a while.
Have installed the latest update though but my 3+ year old laptop with i7, 11GB RAM, GTX 1650 max-q and 1 TB SSD can’t hold up ( stutters, cracking sound etc.)
Some day in the near future I’ll build a decent desktop PC and come back.
I’m using the default multiplayer server in MSFS2020 for Xbox one
No I meant if I’m not using the plane that the other people are.
To be clear, my understanding is that as long as you have (own) the plane and livery “installed” in your game (whether you’re flying it or not), then you will see that model instead of generic.
No for me I see people using some planes that I have in my hangar but for me it shows them as a generic plane..
I can only see peoples plane if I’m using the same plane as them at that time.
see replies above
Do u play on xbox?
I moved to PC back in August but I always tested the Betas to give feedback. This issue (XBOX) has been going on for a long time . On Xbox it is more than just not having the correct livery or plane. Few of us pounded on this issue in other threads and it was finally confirmed as a bug about a month ago. I still try and lookout for the Xbox players as I know not all Xbox issues get enough attention.
I just started playing mulitplayer and have a few questions.
I follow a Youtuber that invites people to fly with him. There is no invitation to a group party it’s just find his plane on the world map and fly from where he is.
Some of the problems I’m experiencing is sometimes when I join, I cannot see his plane. I see everyone else’s planes who have joined but not the main guy who’s plane I clicked on the map. I asked him if he has the setting off to hide him and he doesn’t. I also have the setting on where it says show multiplayer in close proximity.
Once I restarted my console and it worked and I saw him. But other times I still can’t see him. I did this also with another friend I have online and clicked on his plane on the world map and hit departure. When I joined I could not see him anywhere close.
We are all on xbox.