You left out the circumstances under which they will share your data.
> comply with applicable law or respond to valid legal process, including from law enforcement or other government agencies;
> protect our customers, for example to prevent spam or attempts to defraud users of the services, or to help prevent the loss of life or serious injury of anyone;
> operate and maintain the security of our services, including to prevent or stop an attack on our computer systems or networks; or
> protect the rights or property of Microsoft, including enforcing the terms governing the use of the services - however, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property of Microsoft, we will not inspect a customer's private content ourselves, but we may refer the matter to law enforcement.
https://www.microsoft.com/en-us/privacystatement/default.asp...
Additionally, the privacy policy section you and I are quoting applies to many Microsoft services, including, for example, OneDrive. Otherwise, the "private folder" data they're talking about could only be whatever bits and scraps telemetry and Windows Defender picks up, based on my reading.
That seems perfectly reasonable and also confirms they won't be sending any of your data to the MPAA.