All MS apps associated with MSFS (Store, XBox App, XBox Game Bar are the three common ones most needed) have login indicators in the upper right of their interfaces, just like the sim did. You need to click on those to make sure you’re logged in. The “Device Installation” seems to be just a method to sync your apps installed across multiple Windows devices (PC, Surface Tablets, the now deprecated Windows Mobile/Phone etc), and shouldn’t have anything to do with getting MSFS installed correctly.
The “critical path” - log in using your web browser to XBox Live - that should set the first indicator of your authentication. Launch MS Store App and login (again look to the upper right to see status and login as needed). Add or update XBox App and XBox Gamebar, launch and repeat login process on each of those. Return to MS Store and make sure you’re still logged in. In the same upper right area, click on the three dots menu (…) and click Downloads and Updates. See if there are any Mandatory Updates there.
The other place to look is to launch WIndows Updates and ensure you have no pending Windows 10 Operating System updates in queue. That too will trigger Mandatory Updates warning.