I don't quite follow.I mean not that the licence is a property, but that the derivative work is a property; and that a sub-licence is not flowing through that property, but rather a new licence is being created at that point.
I don't know what it means for a sub-licence to "flow through" some property. Nor at what point you are positing a new licence is being created.
If the OGL does not permit sub-licences to be created, then the only party who can licence WotC's work is WotC. If WotC refuses to offer such licences, then no new ones can be created. It's clear that this was not how Dancey intended things to be. And I think the drafting achieves his intent: the definition of Use includes (via Distribute) licensing - which is to say that licensees are conferred a power to license upstream Contributors' OGC. By definition, this is a power to sub-license, because it is a power to confer a licence that is enjoyed by someone who is not an owner but a mere licensee in relation to the property at issue.
This reads like saying it is a chain of H2O molecules rather than a chain of water molecules.it is a chain of licences, and not a licence and chain of sub-licences.
There is a chain of contracts. There is no chain of licences - licences obtain between the owner of the licensed property, and the licensee. A sub-licence is not a special sort of licence: it is a sub-licence in virtue of its mode of creation (ie by a licensee exercising a power rather than the property owner exercising a power), not in virtue of its content.