No it doesn't. The key could be automatically saved in the TPM - locally. Yet Microsoft chooses to save it in its own cloud.

And you could make the same argument against Android 5 and iOS 8 encryption, too. That users won't be able to "recover" their data. Tough luck. Google and Apple did it anyway, and it seems to be a successful move.

Microsoft is now the only one of the three major platforms who doesn't provide secure automatic encryption with locally stored keys.