I think that PowerShell story was how old MS worked, back in the days of stack ranking, hatred of Linux and the Longhorn fiasco. things inside the company are a lot more functional now. I saw internal politics drama at my first position, but once I moved everything was chill, and experimentation and contributing across team boundaries was actively encouraged and rewarded.
I suspect Office suffers from a ton of technical debt, along with being architecturally amorphous and dating from a pre-cloud era. as for Windows, the amount of breakage I see in the betas suggests they're not afraid of making deep changes, it's probably that MSVCRT is a living fossil and has to support old programs monkeypatching the guts of malloc or something.