> This is a common theory of telemetry but ultimately I don't think it makes sense.
It makes loads of sense, to me. It started with the Customer Experience Improvement Program, WAY back in the Windows 2000 era, if I recall, which you would see an option to enable or disable when you installed a Microsoft SDK. They clearly saw benefit from this information, so they expanded it to include the whole OS.
This collects lots of data for them, which helps them understand the usage of their products better, and a nice side benefit is that they can use the knowledge gained by organizing and inspecting this data in their "big data" offerings on Azure and in other places internally.
The greatest benefit of Microsoft's telemetry to others is that everyone focuses on MICROSOFT's telemetry, argues about MICROSOFT's telemetry, debates MICROSOFT's telemetry, endlessly, while literally 90% of the rest of the software you use (99.9% if you count software you use that isn't on your computer, like servers, routers, web sites, and so on) collects telemetry, also, even when you think you've turned it off. Nearly every game you have installed on your phone collects FAR more about you than Microsoft has ever dared try to collect, and no one knows or gives a damn because "OMFG MICROSOFT I HATE MICROSOFT
I don't care if they collect usage information from me. I truly don't. The entire Internet is trying to make me feel like I should care about usage data that originates from my computer, but I don't. I don't feel like it's my data if it truly is telemetric data about software usage.
I would use more free software if more of it were good enough to use. Of course, a lot of free software is GREAT, and I use a lot of that stuff, rather than paid alternatives.