This is awful. Imagine not being able to access your computer in any capacity because you didn’t pay your 365 bill. I switched (back) to Linux last month, I’ll never go back. I’d be fine with Mac, but Windows is dead to me. When the start button stops working on a semi regular basis, that’s a bad sign.
Windows 365 is a service that streams a full version of Windows to devices. So far, it’s been limited to just commercial customers, but Microsoft has been deeply integrating it into Windows 11 already. A future update will include Windows 365 Boot, which will enable Windows 11 devices to log directly in to a Cloud PC instance at boot instead of the local version of Windows. Windows 365 Switch is also built into Windows 11 to integrate Cloud PCs into the Task View (virtual desktops) feature.
While weird it does seem like you would still have the option of booting your regular install (for now).
It is convenient to have a desktop that you can access from any computer and it’s the same - like, be working at home, then go to a coffee shop and be able to use the exact same system from there without worrying about transferring files or having the same apps installed. I used to have that set up using VNC back when I was doing development and left my house more often.