This isn't the first time Microsoft has pushed telemetry and malware in its OS. But I think they have finally crossed the line with CoPilot. What they want to do with it is so incredibly obvious and intrusive that most people just won't stand for it.
I think the EU will take the lead with regulations. They're already onto the phone number for sign-in thing. They're kinda slow, but less slow, ya know?
Well.. I think you are putting too much expectation on a common person. I'm pretty sure a lot of people are going to be 'mind blown', by the ability of the new Recall feature. They will hail it as a technological marvel. Very few people care about privacy, and even in that, very few people really understand how they can have some privacy. Complete privacy is near to impossible.
They're definitely going to back down. I'm guessing they're going to back down a little (maybe create an opt out for the enterprise customers?) and then claim victory, but we'll see.