If Microsoft release a low power device like Surface Go or future ARM devices then reviewers and people open up Chrome and it runs jerky and laggy then they'll blame the device. If Chrome becomes the default browser and gives you bad battery performance then people blame the device.
MS has to ship a browser for the exact same reasons Apple insists on shipping a browser. It's the most used application on the OS and the app that's almost used 100% of the time the device is running therefore it can make a good device feel like a bad device if its optimized poorly.
Notice all Apples web battery benchmarks use Safari not chrome.
You do have some good points. I was thinking how bad it would look on their part if their OS doesn't even have its own browser. Even Gnome has a browser, which is pretty much FirefoxGTK.
I can't put my finger on why Microsoft should cease browser development. But adopting Chromium is definitely a good step in that direction. It's cheaper, normal people won't notice (or care), and they can keep branding.
Honestly speaking its good to have competition and apart from Firefox and Safari (partially due to being Apple sepcific), Edge was the only Browser (with an own engine) that could compete with Chrome.