You can play offline games now even if you have console sharing off.

Settings -> Users and Accounts -> Other -> Restore Licenses

The Console Sharing and Offline Play option is still not working, but you can restore individual game licenses and play offline. This was not obvious to me so I thought I'd share as a top level post in case anyone else was having the same problem.

Edit ... glad this is working for some people. Sorry it isn't for others, except for the people downvoting, I'm super glad it didn't work for you.