why must I use a low-security PIN in place of your pre-existing password?

FAFAIK, all characters that are allowed in a user password are also allowed in device PIN codes. Knowing Microsoft, I'm sure there's domain policies to alter/restrict this. And the idea behind it is sound: that PIN is tied only to a single device, meaning that even if someone watches you enter your device passcode (or uses a keylogger), they can't go to a different machine or online portal and re-use the captured credentials there.