The in-game overlay doesn't seem to work with game pass pc games. It works correctly with all other games and launchers such as Origin, Epic, Uplay, etc aside from Destiny 2 on steam which I found out the game itself blocks some overlays such as yours. I have tried all the "google" fixes: reinstall discord, run as admin, turn off acceleration, toggle game overlay on/off in game activity, removed and re-added game in game activity tab, full close and relaunch discord before and after launching games, also looked for any settings in the game pass launcher and pc settings. Are the game pass games not supported with discord overlay?
I have also submitted a support ticket and so far was only told about the Destiny third party block that I already found out about.