I think it did, then they built up a most that made it very hard to turn momentum the other direction. It's turned now but it happened very slowly. Who knows if it ever falls of a cliff, all I know is that moats are only broken when momentum is going in the wrong direction and so they are certainly more vulnerable now than they would otherwise have been if they hadn't pissed so many people off about their products.
At one point, their desktop user experience was actually pretty good. And that was all their products back then. They definitely didn't get to where they are now by selling products that were bad. You could make the argument that some of them were bad but they were cheap, but if price is a big aspect of what makes a product good in the eyes of the consumer at the time and nobody else is competing on price, then that isn't "bad" in the sense I'm using the word.
I don't think I'd have called them out for always making terrible products all the way through till about Windows 7. I had no major complaints about that release, cloud was in its infancy, no pushing 365 etc. After that, quality started to go downhill. To the point that I'd argue with a straight face that most major community supported Linux DEs provide an objectively better and more stable user experience for both technical and non technical users.
You're probably correct: "Our developers a very happy with CoPilot. They now spend 50% of their time interacting with our AI offerings, either via VSCode, Github or Clippy."
No need to specify why they are interact with it, all engagement is good engagement.
By this measurement, a slower compiler is better than a faster one, because developers are using it for more of their time. Totally bonkers, Microsoft!
When your identity is tied to that being a success, you will find a way to make it so, because it feels much worse to have your identity challenged at a fundamental level than it does to have people grumpy with you for acting in a way that allows you to preserve your identity.