PINs are encouraged because when a password is used, it is the user's microsoft account password. By not entering this password publicly, it increases the security of the microsoft account.
Edit: to me it seems like microsoft is using a password for their cloud account, and a rebranded password for offline access.
It changes the threat model from "knows password" to "knows PIN and has physical access to user's device".
ETA: Something the article should probably have better underscored was Microsoft was specifically talking about "Windows Hello" PIN entry rather than PIN usage in general.
(Also, it doesn't have to be a PIN, it can be biometrics if you prefer.)