It's an issue that plagues many people, the controller works on everything else just not Game Pass for PC.
Here's how to fix and get the controller working in Game Pass games on PC:
1. Right click Start button, open Device Manager
2. Scroll down to "Xbox 360 Peripherals", expand it
3. Right click "Xbox 360 Controller for Windows" and disable it.
4. Restart PC
It will now work, ensure your controller is set to Xbox mode (press function key, menu button, X at same time)
This fix will also make the controller working everywhere else if it wasn't already.