So I figured this one out in case anyone is looking at this.
The issue ended up being with the windows store and not the game. I know this because I tried downloading other free games and apps and nothing was installing/launching. I tried numerous solutions like resetting windows store, clearing the cache, etc. The only thing that worked for me was a complete windows reinstall. That did the trick and I'm able to run the pso2 launcher now.
Really shitty though. Not sure how windows can fuck up their store so much to cause me to have to reinstall windows. This really should have been on steam.