Encrypted video is a red herring. The real long game is to also get your "secure" video player to refuse playback if it detects watermark in the pirated video. This patches the analog hole.
If you have attested Windows it can just refuse to download "freeworld" VLC because it can be used for piracy and/or even watching child pornography. Imagine that!
Of course you can use Linux instead but now you have to use the approved distro that also won’t let you run "dangerous" apps.
This is of course slippery slope argument and Microsoft would not be able to force all that right now, but better get started on the foundations. Some future government can then just force them to implement the rest, but by then it will be just a flip of a switch.
"TPM is not DRM" argument seriously lacks imagination.