Good job WordPad - one of the flag bearers of Microsofts anti-competitive business practices.
For Win95, the new included-in-the-box email client required a text editor which supported multiple fonts, colours, font styles, et al. But Microsoft Write code was not written to be modular and cross-platform (much of the Win95 email client code would also run on the Macintosh, for Mac OS System 7.x).
So the RichEdit windows control was created.
Wordpad.exe is a thin wrapper around the RichEdit control, like Notepad.exe is a thin wrapper around the text edit control.
It's unusuable now.
Microsoft Word for Windows was released in 1989 November, four years after Windows 1.0 included Microsoft Write. see https://en.wikipedia.org/wiki/History_of_Microsoft_Word
And the later WordPerfect for Windows was competition that MS was keen to kill.
"The Windows 11 Notepad uses the RichEditD2DPT window class with a recent Microsoft 365 RichEdit."
1. Ship Word with Windows and not get paid for it, even though they had hundreds of engineers working on it.
2. Ship no word processor with Windows, and make the end user find one on their own.
3. Ship a basic one and let the user upgrade to Word if they needed something more.
At the time with option 2, it's not like you're going to hit google and download some FOSS solution - you would need to go to the computer store and pay $200 for something in a box off the shelf.
I'm thinking option 3 was a good middle ground, and a win-win for MS and the customer.
The irony was that Microsoft included Microsoft Money in the Works suite, likely to give an aspiration of saving and making enough in order to upgrade to the Office suite.