How to fix the character lock issue
Game sharing is a feature found on Xbox One that allows people to share content on two different Xbox One consoles, which is very useful when it comes to families or roommates in particular. Using game sharing, games can be purchased on one account and played on both, although this can only be done with two people.
This feature of course extended to The Division 2, allowing people in the same household to play on two Xbox One consoles if they used it. This also seemed to work for the Warlords of New York expansion, as the account that didn't purchase the expansion could still download the add-on as usual to access it.
The problem came when players were going to start The Division 2 and head to New York. You will usually be able to play for a while, but after a few hours you will be started at the main menu and be completely locked out of your account. Since you cannot return to DC in the game until you have completed the New York section, it means that your character you used has been completely locked out for the period of in-game use.
Fortunately, Ubisoft quickly fixed this issue with a new update that should hopefully fix the bug. Simply downloading the update may not work because they recommend that you restart your console and then download the update. Once you've saved The Division 2, you should be able to access your character again and jump straight into the Warlords of New York expansion, whether you use it through game sharing or not.
Ubisoft also confirmed that it will work thanks to game sharing and that it was just a bug that prevented it from not working. However, the same cannot be said for PS4 owners who use the share feature on their consoles, as they have confirmed that Warlords of New York cannot be accessed through it. While the share feature would work for the base version of The Division 2, both players would have to purchase the Warlords of New York expansion separately to play.