Just wanna say: Thank you for engaging honestly and openly.
I think your last few paragraphs are likely describing the issue for a few more technical users, while SirBlain has better described the issue as it relates to the typical personal user of Microsoft's products.
I don't think so. Nagging people to try things that aren't relevant to them at that moment, or at all, is just generally annoying. For anybody. Whether it's placing game advertisements on a Windows Professional install automatically, enabling keyboard shortcuts that make normal OS interactions impossible, or just popping up little speech and hint bubbles up all over the place, or being unable to find local files in favor of searching Bing, or associating Edge with literally 50 file types that all have to be changed with an extra warning independently, or any number of other silly things.
Nobody appreciates any part of that.
Why are they focusing on stuff like this instead of fixing the broken file indexer to power features like system-wide search, or provide a preview feature, or fixing the local backup solution, or reducing resource usage to leave more for our games and applications, or improving how applications scale with resolution if different displays have different display scalings, or unifying their settings apps? It's taken 10 years now and we're still not there.
Basic OS functionality is left to rot. What are we doing here?
However, what I don't think many other than people like those trying to aid others here understand is that the security issues caused by passwords have grown exponentially as new methods like passkeys and other 2FA methods are finally gaining popularity, resulting in a massive increase in 'last gasp' successful account thefts using passwords, especially of those like gaming accounts that are easily sold by organized criminal gangs.
I don't know what kind of passwords people are using, but I want to note that I am now 34 years old and I have lost 1 account to theft. Ever.
The problem really isn't as big as you think it is.
Passwords are truly useless as 'security' now, since there are simply so many ways they can be captured or stolen, meaning they must be removed as soon as possible from all accounts, not just those belonging to less technically capable users. It's truly surprising how many people post that they knew better then to make the simple mistakes that resulted in losing their accounts, or getting scammed, or any of a number of different ways that criminal organizations have found to monetize the average home computer owner. And even here we're seeing the same issues happen to those using Google or Apple products, so Microsoft isn't the only one having to deal with this, simply the largest.
Perhaps it might be an idea to stop allowing any application to read the clipboard at any time without a shortcut even while not the active window? Maybe it's time to stop allowing applications that don't have focus to read every keystroke?
Or actively doing it on iOS until Apple has to step in? Or, perhaps, actually allowing users to register their own secret service as they can on both macOS and Linux? Then our passwords wouldn't be in our minds or our clipboards.
Now I'm gonna get a bit harsh, but I really do laugh a bit being told that it's for security on Microsoft Windows systems.
How can you possibly claim to be doing this for security when any app can capture any part of memory on the user's account at any time for any reason? You can attach yourself as a debugger to anything and read the memory of virtually any user space process and even modify their memory. Video game companies are making drivers that are bluescreening people in order to prevent you from attaching debuggers to particular processes.
You can make background daemons and services that steal your passwords. You can modify important system files. The standard Windows executable format is still used and it isn't compatible with ANY granular security systems in Windows 11 at all. You either disable them for one or for all. Elevantion prompts never inform you abotu what the program intends to do. It's just a carte blanche yes/no.
Do .exe files not have signatures or checksums? Yes, they do. Not inherently but almost all of them do or they'll warn you. Sure, have a fallback, but really...
The other thing that most probably don't think about is that unless they're purchasing something from Microsoft other than the Windows that comes with a new device, there likely isn't much reason for Microsoft to care if they lose them as a customer, since last I read that copy of Windows typically nets them something around or possibly less than $50, while the true money is made from subscriptions to things like Microsoft 365 (e.g. Office), the added Cloud storage this includes or other products like games.
Listening to you is why I personally suspect Microsoft would be fine with losing customers that don't truly want to use their products, since from their standpoint it's really the commercial users who also need their employees to have access from their home machines or those wanting Microsoft 365 themselves for either small business or personal use that are the customers they really want to retain.
First and foremost, $50 per license would make them $12bln per year at 80% market share. That's not nothing. Windows may be dwindling by comparison now, but it's by far their biggest investments and legacy.
Secondly, Microsoft earns no money from me storing my passkeys with them as opposed to other services. It literally is solely an expense. The reason for this is simply spaghetti. That's genuinely what I believe.
I don't have a pathological dislike or disdain for Microsoft, and I don't have any reason to trust them any less than the other tech giants - though of course that invites comparison to companies like Google who release a "Do not track" flag in their browser and then proceeds to ignore them in their own ad network business. So... yeah.
But really, I've used Skype (with a phone number!) and MSN Messenger and Office and I've played their video games like Halo and Age of Empires and MSFS and so on.
I think Windows for ARM proves that it is not actually Microsoft that dominates - it's the WinTel cycle. Everybody's on Windows+x86 because all the apps are there and all the apps are there because everybody's there, see point one. It's a snowball that was created in the 9x days and it's still rolling. As long as backwards compatibility is reasonably maintained people will stay on the platform, and they pretty much ignore everything that's happened in the last 15 years, trying in various ways to "evade" the changes by just doing the same things they always did but slightly differently as buttons are moved around.
Here's why it's important: If private customers get fed up and switch away from Windows, then they'll get annoyed at work too because they can't use their workflows from home, and then Microsoft's base will start eroding. But... as long as the WinTel machine keeps chugging along, it's going to take serious effort to chase people off. Being a bit annoying isn't gonna do it, and Microsoft is exploiting that fact to the hilt with implementations like this.