License transfers of that sort are best done if the original owners aren't going to be logging online with that account anymore. Even if they log in I don't know if it'll void their license. It does work, though; a couple forums I've gone to had large threads that were basically account trading; everyone'd buy games on a secondary account, download everything to their console to get the license, and then trade/sell the account to someone else. It's technically against the Xbox Live Terms of Service but I've never seen accounts banned over it.
