MS should have allowed them an exception to leave the split screen coop mode out of the Series S version (how many people will even use that feature?)
Even if they manage to get it working, this game will now come out later on Xbox, even though it's not a timed exclusive. So in effect MS is just handing Sony a free timed exclusive for no good reason, because they stubbornly insist on complete feature parity between XSX and XSS.
As we get further and further into this console generation, this is going to happen more and more due to the XSS's lower horsepower. Microsoft needs to reevaluate their policy for feature parity.