Solved my Profile issue: XBOX Series X, Velocity 1 with latest Firmware.
Not a nice fix, I had to completely uninstall the whole sim and IMPORTANTLY, Delete my XBOX MS FS Save file from both local and cloud. This lost my all my settings, my progress, my flight logs ect. so FS reinstalled from scratch (half a day) and then ran as if it had never run before. Now all my controller profile issues are solved. Only thing which did not reset are my trophies, they are recorded separately by Microsoft.
Hope this helps someone, what a pain, but at least it is all working, and in a way probably is a good time to do a complete fresh install, just wish it was not enforced as it was.
Good luck pilots, anyone on XBOX find a simpler fix in case it returns?