My Dad (XBL: WhiterabbitUSMC) has the same issue and can not progress the story as a result.
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Hi there. He will need to progress through the Season of Arrivals campaign on a second character where his inventory is not full of Umbral Engrams. The campaign is account-wide, so once you unlock the ability to decode them on this second character, you can go back to the original character and turn them in.
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Thanks! Worked perfectly!