You don’t know that a walled garden requires them to lock you in to only install from their store, while windows lets you install anything you want however you want. While S mode exists, it’s never going to be the only mode because people need legacy win32 programs and all sorts of custom programs. Microsoft know that removing that ability will destroy Windows, which is why they haven’t.
Copilot has options to not collect data etc. copilot and recall are completely optional - you don’t have to use them. They’re not “spyware”.
I’ve been around since floppy disks too. You should know better than what you just wrote if you have been around this long.
The benefit of having it at home on your hardware is that you have way more control, and it is on your local network so it can control local network stuff without going through the internet, while also being connected to the internet for things that are internet-requiring.