It's not ridiculous. It makes complete sense that in 2019 Microsoft would want its customers to have Microsoft accounts that you log into with to run the operating system on your hardware. Nearly everyone has internet connections, and Microsoft surely seems to think enough of its customers do.
Apple's mobile devices run an operating system that has this same requirement with the same bypass. MacOS also prompts for a password during set up. Android phones prompt for a Google account on set up.