Verifying that the user is entitled to your app is required when you sell an app on the Oculus Store. This check verifies that the copy of your app was purchased legitimately. Once purchased, the user receives an entitlement for your app, which you can associate with a Custom Item as a reward.
The entitlement check does not require the user to be connected to the Internet. In the event of a failed check, you should handle the situation in your app. For example, show the user an error message and quit the app. A failed entitlement check won’t result in any action on its own.
I handle entitlement checks in the following way and it's been approved 4 times.
On menu/main screen load check to see if user is entitled.
If not entitled I hide the main menu and replace it with text saying "User is not entitled to play this game" and display a Quit button.
Hope that helps