then they can better protect your account, force regular password changes, force password complexity requirements…

if that was the goal, they wouldn’t be saying on the password input screen to “choose the most simple password”, and especially they wouldn’t accept that field to be left blank

if you are not logged in, they can’t setup onedrive to automatically steal all pictures and documents of the unsuspecting user, and they can’t setup bitlocker with a cloud key that they could use to lock you out of all your data when they think so.

windows update has zero reasons to not work without an MS account, and actually it does work that way.