"run a bead along the rabbet,"

No, you want the joint compound to engage the raw surface, so just sand and clean, place the glass, insert glazing points, then run another bead on top.

"The latex glazing tube says it's not to be used on windows more than 48."

Thats a glazed area. You said that yours is a divided lite. Thats 4 glazings.

"If I'm using glazing points does that restriction matter?"

You still use the glazing points.

"The tube also says to "round" the corners"

There are 4 corners to each glazed area.

"Traditionally (with oil based) the corners are slanted at an angle"

Thats an edge.

Thanks for the response! I'm still a bit concerned about the size of the window, since the glazing tube actually says it's not to be used on windowPANES more than 48" in any direction. That means the entire window unit, not just each lite, right? Oh well, I have it all taken apart and I'm committed now.

My question about the corners was that it sounds like you're supposed to make a round bump in each corner with the latex glazing, which I've never seen before. Maybe they just mean that you have to apply the glazing all the way around the perimeter (duh, who wouldn't do that anyway?).

thanks again

"it's not to be used on windowPANES more than 48" in any direction. That means the entire window unit, not just each lite, right?"

No.
In a true divided lite, there are as many individual panes, as is divided.

In your case, 4.

"My question about the corners was that it sounds like you're supposed to make a round bump in each corner with the latex glazing,"

It's not a bump, but a continuous motion in the tooling or application, when applied with a caulking gun.

"which I've never seen before."

Because your point of reference is with a glazing compound which you have elected not to use, which is typically tooled with a putty knife and simulates a mitered corner.

quote
"Because your point of reference is with a glazing compound which you have elected not to use"

which (IMO) is a mistake

I used that material about 20+ years ago; you apply it with the caulk gun, and I guess if you did not care if it looked like crap, you could stop there. But it can be tooled with a very clean polished putty knife, if you keep cleaning it off and keep a bit of water handy. The latex glazing is stiffer and grainier than ordinary caulk.
If it were me, I would set the glass panes with regular caulk or silicone, (which is an incredible adhesive for glass) wait until the silicone cured, and scrape away any excess on the putty side, then use the glazing. The points are going to rust however, because of all the water in the product.
When I last used it the label did not say anything about rounding the corners, and I can't really visualize what they mean by that. I was able to get the stuff to look pretty close to real glazing.
It's ironic that what I used it on was a set of 11 large windows I made from reclaimed heart cypress, then to have to use that crap to set the glass...
Casey

Thanks for the input, sombreuil! That's funny about the windows you made. And it's scary that "20+ years ago" means the 1990's! Ahhhh! I'm getting old.

So if the points are going to rust should i not use them?

i'd be worried about using silicone to set the glass because it's so hard to remove. The glass that was in there was set with what looked like glue (but was probably extremely old silicone) and all except one of the panes of glass broke when I tried to remove them (even after endlessly using a knife to try to break the seals).

So regular exterior caulk (i normally use Alex plus) would be better for seating the glass than the window glazing? Then use the glazing just on top of the glass?

Here's what the label says about the corners:

"3. Using the special angled nozzle on the cartridge, smooth glazing to an angle that sheds water. There should be no gaps, spaces, or indentations. Then shape corners to a rounded finish only. Thickly glazed sections may require tooling with an appropriate knife."