I'm with you on this one. I was an architect of a quite large SVOD streaming service and this sounds like a runaway engineering division that's lost.

Sure, you can log and trace every tiny event but they've forgotten to ask whether or not they should and what are you getting out of it. It's creating a problem that doesn't exist, then solving it (by creating 2 more complex systems). 500 microservices sounds excessive but not out of the realm of belief.

I do wonder if it might relate to the way they're measuring engineering performance.