I feel like this won’t stop anyone who was already refusing to use a Microsoft account for windows. Anyone who was already bypassing the account requirement will still do so, it just will be more difficult. They’ve accomplished nothing except further pissing off some of their most competent user base.
Japan in general has weird copyright/patent laws. For example the whole palworld patent lawsuits.
Good news is it probably won’t affect people outside of Japan, except that it will stunt games/etc made in Japan.