“…licenses are non-transferable between sites once assigned.”
Therein lies your problem. That’s a dumb policy, and just about every other plugin developer has a solution, except Updraft I guess.
As long as the number of available activations remains the same, there is absolutely no reason why the license/activation cannot be deactivated and activated between domains. The license is not being transferred to another person, and valid Updraft login credentials are needed to make any changes anyway (both inside and outside of WordPress). So please don’t give me a goofy answer that makes no sense. Instead, just say “Unlike other premium plugins, we have chosen to make it more difficult to activate and deactivate licenses, hoping that people will instead just buy another license to avoid the hassle.”
In any case, thank you for deactivating.