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those hoping to avoid that will have to use a dummy Microsoft Account to then create a local one afterwards.

And then delete the Microsoft Account? Would that leave traces?

Define “traces”. If it hits Microsoft servers with your reg key, then you’re cooked.

It's not that dramatic. They can't do much with just the reg key.

They can identify you if you’ve ever used any other information with it. Why do you think they want you to have a Microsoft account?

It isn’t dramatic at all, it’s the blatant truth.