Oh hey, found you in a 2024 HN thread while searching for info on that smoot subdomain. I guess you've been at this for a while.
FWIW, Microsoft hardcodes dozens of subdomains, not just that one. Windows includes hardcoded domain names for all sorts of services that are important to them, like the universal backdoor and its self-healing functions (naturally), and servers used for Microsoft account sign-in and telemetry (of course). They really wanna make sure nothing stops them from uploading your disk encryption keys to their servers! (or something)