Considering I haven't tried to re-install it a 3rd time I doubt I missed any steps.
Can you shut your computer down, restart it, and then get the game to run with no problems? I have no problem getting it to run after the initial download. I can even close the game and re open it with no problems. The issue (as it is with a lot of people) is when we shut it down for the night, then try to log in the next day. The game appears to do nothing. I found that you can at least run the launcher from the windows store, but after the initial little box graphic that says Phantasy Star 2 appears and dissapears, it doesn't run the game. If you do any tweaking at all trying to to get it to run it will then just attempt to re-download an entire new installation and put ANOTHER folder in program files/windowsapps/mutablebackup
btw: the game is completely deleted from my system at the moment. Sega folder, mutable folders in windowsapps, everything. I'm going to give it a nother shot since I've already basically deleted everything you gave instructions for. If it doesn't work I'll try your guide to uninstall and then re download it once more for a final attempt. Thanks for the post!