This is my second post regarding this issue and through my own troubleshooting I have found that any version 14.3 and up does not allow me to use library images in any way shape or form. My system does not allow me to add library assets to the project via "right click", drag and drop onto sequence or project panel. This seems to be extremely isolated and rare so if any other users are experiencing these issues please let Adobe know. I have tried all the fixes suggested by trashing preferences, uninstalling etc.
I installed version 14.2 and the library assets work flawlessly. I have also recently upgraded to the latest compatible Windows 10 to comply with the latest Adobe upgrades. Not sure if there's a connection but pretty coincidental.