This is absurd, the fact that Windows has 70% if global desktop operating system market share makes them their most important moat, why are they deliberately taking actions and steps to make it worse? They added ads, forced updates, mandatory Microsoft account activation, so much unwanted AI slop... Think about it, if it was another more competitive company, they would be charging for the AI service and the onboarding experience would be totally different. It seems like the management is totally disconnected from their product.
I think the summary is that "product owner" types and other agile simulacrums wanted it simply because they viewed it as an easy win towards KPI and other performance metrics. The most damning proof of this is Copilot in Notepad, and that half-attempt at renaming the entire Office suite to simply "Copilot" (they seemed to reverse this a few days later).
The moat is still secure. So the strategy is to loot as much value as possible from within the moat. After all, where are the corporate customers going to go?