MIT license doesn't require copyright headers. You need to credit the authors even if the files don't have headers.
Now if it's not the right way to do it, what about opening a PR and asking to change it? Instead of writing a blog post to complain about them?
Now maybe those engineers thought they did well, will get issues internally because of the bad publicity for Microsoft, and next time they want to use an open source project their legal department will be even more of a pain in the ass because if they aren't, then random people on the Internet use that to do bad publicity for the company.
Why not assuming that they are in good faith here? There are enough reasons to hate Microsoft other than this one.
When you depend on a third-party, you don't add their copyright in your main LICENSE file.
In this case the code is essentially forked, integrated and intermingled, so that is why it should be in the LICENSE file.
If it was file or two, it would be fine to add a comment pointing to the license file in the repo, if it was a directory, or to copy it verbatim to that file. It all the copied code was in a directory then having it in directory would be fine.
In this case it looks like they took the original code and heavily modified it, so the simplest way to solve it is one LICENSE with both notices.
I don't think that the licence asks to do anything like that. Where in the MIT licence do you see that?