Okay so I took some time to do the best research I could in about 20 minutes. I may not be one hundred percent correct, infact I could be entirely wrong but I’m gonna try.
 (the following is unbiased and is meant to be informative)

 Now from what I can tell the reason this happened is because this was the secondary console. Basically (after updating the console) if you download a game from Xbox live, it will always work on your console no problem. However if you sign in again on another person’s xbox and download it then it is no longer on the primary console and will check if the account that actually owns that game is signed in.

 So for using your own console this should never actually be a problem ever. This also only is supposed to apply to Xbox live arcade games (far as I can tell at the moment).

  What this does mean this that Killer Instinct will be difficult to host at tournaments because KI will need to be bought on each one which is a tiny bit harder than having people just bring in copies of the game. It also means you can’t just install a game at a friends place and he can just play for ever.  Basically as far as Xbox live donwloads nothing has actually changed since the 360. On the 360 you had to be signed into your account and online to play the full version of downloaded games on another console. The PS4 also does this from what I can tell.