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Microsoft would far prefer you installing a pirated copy of windows to installing Linux.

Only WinDev, Azure, Office, XBox business units couldn't care less, they get their share of the pie, regardless.

Windows development currently sucks, versus Balmer era, and is full of Web developers for a reason.

Microsoft is the reason why this practice exists in the first place. Their Windows distribution contracts with OEMs say that all computers that an OEM ships must be preloaded with an OS (likely for the piracy issue you mention). Shipping FreeDOS allows OEMs to sell computers to people who don't want to pay for Windows licenses while also not having to provide support for Linux (or some other alternative OS).

On the contrary, being the primary desktop OS that everyone uses and thus everyone supports is Windows' biggest advantage. Anything that helps thingns stays that way contributes to Microsofts bottom line.

The get the money back via Azure Cloud OS (> 60% workloads on Linux), Microsoft 365 subscriptions and XBox.

They monetize your data.