MSP430g2553 pullup/down resistors not functioning as expected.

PxOUT will show at the Px pins under two conditions. (1) PxDIR is set, and (2) PxREN is disabled.

You may set PxREN only when PxDIR is cleared.

There are two documents which describe mainly the MCU, the "User's Guide" and the "Datasheet". The User's Guide gives a general description of the MCU family group and the Datasheet gives specific information about the MCU used (and overrules in some cases the User’s Guide). Your reference to "8.2.2 Output Registers PxOUT" is not in the 'Datasheet' but in the 'User's Guide'.

In the Datasheet you can find the 'Port Schematics’. According to this schematic, your assumption is not correct. Also, a voltage divider cannot give here 1.2V but diode-Vf (diode voltage drop) less.

I think there's something else going wrong.

Joseph Woodrell said:

"8.2.2 Output Registers PxOUT

Each bit in each PxOUT register is the value to be output on the corresponding I/O pin when the pin is
configured as I/O function, output direction, and the pullup/down resistor is disabled."

so in my mind if the "DIR" bit was set for a pin it would ignore the "REN" bit and just set the pin as an output.  however when it functions as the opposite,  if the REN bit is set, it becomes an input with the resistor set and ignores the "DIR" bit.

That quote from the User's Guide doesn't say anything about what happens when the DIR and REN bits are both set, so I don't think you can conclude anything about which would override the other from this. That said, the next page has the following line:

If the pin's pullup/pulldown resistor is enabled, the corresponding bit in the PxOUT register selects pullup
or pulldown.
Bit = 0: The pin is pulled down
Bit = 1: The pin is pulled up

That appears to match what you've observed, but there's a complication. I think this second quote only says that the pull resistor direction will be selected by PxOUT, but doesn't say that the output buffer won't also be enabled.

The port schematics in the datasheet look like this for P2.4 and P2.5:

So with PxDIR and PxREN both set, the output buffers and pull resistor (in green) should be both enabled. They both take the same value (from PxOUT), so the effect at the port pin should be effectively as if the resistor wasn't there.

So now we're back where we started...

Ok, I've just done a quick test using the following code on the G2 launchpad:

#include <msp430.h>

void main()
{
    WDTCTL = WDTPW | WDTHOLD;	// Stop watchdog timer

    P2OUT = BIT4 | BIT5;
    P2DIR = BIT4 | BIT5;
    P2REN = BIT4;

    __bis_SR_register(LPM4_bits);
}

I jumpered P2.4 and P2.5 to the two on-board LEDs. The LED powered by P2.4 is very weakly lit, while the one connected to P2.5 is bright. The same occurs if the code is modified to use P1.0 and P1.6, so it isn't port-specific.

This confirms that having PxREN set disables the output buffer. That's consistent with what's written in the User's Guide, but doesn't match the port schematic.

The same test on the MSP430FR5969 shows that on that chip PxDIR overrides PxREN (both LEDs are bright). That matches both the User's Guide and Datasheet for that chip.

So I now tested this as well and I can confirm this behaviour. If you do not connect a load to the pin, the output voltage does not change whether the PxREN is set or not. But if you connect a load to the pin, without having PxREN enabled, the output voltage drops only very little because of the driver's resistance. But when PxREN is then enabled with the load connected to the pin, the output voltage drops heavily.