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The steps related to PDF Subsetting and PDF embedding are "extra" steps that occur after the step "Report formatting ".
In order to take into account the line :
XYZFONT = "XYZFONT.afm XYZFONT.pfa"
the font used during the step "Report formatting " must be XYZFONT .
Did you test to generate the Report with DESFORMAT=HTML ?
Check in the HTML output the font name used for the "Barcode Field".
For more details , you can refer to the document :
Troubleshooting Guide for Font Aliasing / Font Subsetting / Font Embedding Issues (Doc ID 350971.1)