Except the part where Windows used to be installed on a machine and that was the end of that. Then Win10 encourages you to use a Microsoft account "for syncing". Then Win11 insisted you use a Microsoft account, making it close-enough-to-impossible for regular users to still use a local account at all.

So there's nothing new here, because MS already started down this path years ago, we're just commented midway through. If they'd gone cloud at Win8, no one would have gone for it. At Win12, after this gradual descent into "listen to my voice, you don't even want a local account, you can't even remember why you ever wanted one in the first place, this is so much less of a hassle", it'd be a fairly easy sell to the masses.

Throw in an yearly subscription plan that buys your company permission to run windows server, where your hardware can act as access point, syncing with MS's infrastructure, but isn't the primary data host, and that sure sounds like something Microsoft would absolutely love to be in charge of.