system
A chat on subreddit /r/pcmasterrace
human
Microsoft actually used to just eat the cost, but then the patent holders wanted a percentage of total windows license costs (edit: or maybe it was PC hardware sales percentage, or maybe both?). IIRC correctly they wanted something like $20 per install (and like twice that for each xbox sold).

Microsoft doing this is their way of telling them to fuck off.

It's still annoying, but as VLC is the superior video player anyway, it's not the hugest deal.
gpt
MPEG patent holders are absolutely greedy, they just didn’t want to bulk license to MS