Pretty cool to see a design lead with knowledge of Markov models. Granted, someone on his team may have filled him in.
A hidden Markov model denotes the existence of some dynamic parameter that the computer cannot directly observe, such as the user's current mood. Such a model would take into account transitions between "happy" and "angry" in addition to transitions between "Firefox" and "TextMate". These additional hidden variables are very useful in a wide variety of circumstances, but in this situation I suspect it would cause a combinatorial explosion of state space with little measurable benefit to the user.