Utter rot.
This used to happen all the time in the 1980s and 1990s, before the DoJ anti trust lawsuit really got rolling.
It was most obvious in office apps (ever wonder where the third-party spelling checkers and grammar checkers went? Or the standalone mailmerge applications? Microsoft added their functionality to Word and killed an entire add-on market at a stroke each time they did so), but a load of that stuff happened in Windows too (the graphical shell that became an OS in its own right). The most flagrant late example was web browsing; the most recent one I can think of (not being a Windows user) was their antivirus/malware add-in.
(Honestly ... young 'uns these days ... wanders away mumbling into beard and waving walking stick in the air.)