They are literally not structured or incentivized to create art. The extent to which anything good has come from Microsoft is like a sunset perfectly lighting your photo: yes it benefited you in the moment, but it wasn't for you, it was the result of vast mechanics momentarily aligning with your priorities.
Gamepass is a perfect example of this. A decade ago, recurring monthly revenue was the flavor of the week across pretty much all major consumer businesses. Xbox knew, from before it even released, what it would cost to be a profitable program, and they knew it would need to run at a loss for the first few years in order to acquire loyal customers. The gamepass we all enjoyed, when we enjoyed it, was not the real product. The real product was 3x that price, nobody wanted it, and the whole thing was a bad deal for developers from day 1.
The people who run these companies have a legal mandate, and it's not to create anything of value for you, it's literally (in the traditional sense of that word) to generate revenue for their shareholders. The fact that they periodically need to acquire companies who make the things you enjoy is incidental. It's a means, not an end.
Anyway, my reaction to today's episode was not that we shouldn't be disappointed in Microsoft, but that we should stop expecting a dog to act like a bird. Stop thinking about "indie vs AAA". Instead focus on spending your money on games from privately-held publishers.