It's awesome to me that no one can clearly state what this is a violation of, but we all tend to agree, yes, a rag-tag group of product-loving enthusiasts absolutely have no right to go poke around & make things awesome & cool & to improve the product. That's absolutely not ok. We agree. But we also don't even know why or how we got here & why that is.
It's still not piracy.
I get that you think this project is cool and the authors are doing admirable work. I don’t necessarily disagree there but the reality is this is not legally defensible. It is a violation of copyright to redistribute software without the copyright owner’s permission. That is the definition of software piracy. Whether or not Microsoft pursues legal action is a separate matter.