That might be an indication that the business is not sustainable because there is not any technical or practical differentiator besides scale. Harming your customers to maintain that differentiation isn't sustainable either.
There is a difference between being able to validate a Windows license and copying Windows from source code.
If we are talking about distillation vs building from scratch, none of these are congruent to Windows. I can build my own LLM [0] and then distill off of Claude, but that is not the same as a 1:1 copy of an operating system because there was the ability to crack how licensing works. We are not seeing Windows clones, at the source level, for that reason.
Also, Linux exists. Anyone can copy that. Why doesn't that count?
Did it really? Here in my <large 3rd world country> at least, afaik no one's stopped pirating. The tools to activate may have changed but haven't gone away.