And another user signing up just to pass on thanks @AyrForce63. I almost stumbled upon this solution myself, I’d looked at my xbox cloud settings as I knew they were the issue but I never clicked edit gamertag.
I skipped the age verification and it still works for me.
As soon as I selected MSFS from my XBox library I knew it was fixed because it displayed “Latest Save in Cloud” above the run button which it had never shown before.
A couple minutes later I was at the main menu, with no request to install essential packages and all my files etc are there.
I’m also disgruntled at Microsoft. I have been round and round with this and have tried everything (even installing on different drives\PCs). I knew it was cloud sync issues of some sort but I couldn’t figure out. There should not make it as difficult as they have. How long has this age verification been causing problems for people? Surely not for as long as essential packages were added? And only 7 days ago was the actual solution posted? SMH.
Put simply, when XBox tells you that unless you verify you age it will disallow access to certain social networking features, it neglects to tell you that included within the disallowed features is the ability to run MSFS-2020 at all. No age verification, no play. If they’d been explicit about that either in the nags to verify age in Xbox or the essential pacage update loop you then get into in MSFS-2020 it could have saved me a couple of days and a complete reinstall. Thanks to those here who pointed the way to the solution to the problem.
Yes age verification worked for me, been using it for years without previously but hey ho working now thanks all
Thank you @AyrForce63 I have been struggling with this for some time…. terrible communications from MS
Thank you so much, AyrForce63!
Your accidental fix completely solved this for me, and I am incredibly grateful.
Before finding your post, I noticed that if I just chose not to install the updates, the sim would actually let me log in and fly. However, I was completely miffed as to why my flight logs were suddenly zeroed out. I originally just chalked it up to an installation error that had accidentally reset everything.
Completing the Xbox age verification worked perfectly, got my logs back, and I am finally out of that endless install loop.
I really appreciate you sharing this!
I too have been trying to get past essential packages and last night all I did was verify my age in my Microsoft account and it all works
Literally just made an account to respond to this post. To, @AyrForce63 THANK YOU SO MUCH I’VE BEEN TROUBLESHOOTING THIS FOR DAYS!!!
My sim decided to do this after the xbox outage this week (no idea if the outage for some reson made it start detecting my lack of age verification). Two sim reinstalls, countless MS store resets and much frustration later assuming its simply a cloud issue. I stumble upon your post trying to fix an issue I assume has come from the fresh install.
I too have been doing my best to avoid handing my ID over to 3rd party companys due to an awfully implamented law!
Thanks again didn’t think it would still be effecting people in July but here we are!
@AyrForce63 you are a star - stuck for ages on this and found this post - problem solved exactly as you describe.
I’d love to try this age verification thing to fix my flight sim, which has had the “download the essential packages” problem for several weeks - but now I find I can’t get in to my XBox profile info! Every time I log in to the web page I’m taken to, I’m immediately logged out again! It helpfully tells me that maybe I should close other browser windows, but even with NO OTHER WINDOWS OPEN, I hit the same problem (on both Chrome and Edge). It’s driving me crazy! I’ve tried deleting the cookies for the XBox site, but it makes no difference. I’m at my wits’ end.
If this is what I had, and it does sound similar, I had to “delete browsing history” in my browser, as it was automatically entering stored info.
That may also explain that “close browser window”.
Make sure you read up on it first, it does remove a lot of stored info on your pc.
No guarantees, but it did help me.
Thanks for the reply, @TheSevenflyer, I tried it, but it made no difference 
The search continues! 
Does this occur if you use a different device, phone vrs PC?
I’ve been using my PC - I haven’t tried on any other device (yet). One thing I noticed on this last try - before I get logged out, a box appears asking me which account I’d like to use to sign in with, but then it immediately disappears to be replaced by the “you’ve been signed out” box. Which is odd, because I’ve only got one account (that I know of)! Thanks for the additional reply - I’ll have a read of it later, as it’s nearly dinner-time I appreciate your help!
SUCCESS! Today I logged out of my XBox app on my PC, logged back in again, and this time when I looked at my settings (I think it was), there was an Age Verification button to click (which wasn’t there before). I followed the link and used my credit card to verify my age, and when I then loaded up MSFS, it fired up without the five set-up screens which have been bugging me, and NO “Install Essential Packages” box. I haven’t flown in it yet, but it all looks as it should do, so I’m assuming the problem’s solved, thanks to @AyrForce63 and their fix. Eternally grateful to you, and this Forum!