Earlier quoted context omitted.
I suspect Microsoft would earn more money by doing this. Their own engineers would get productivity boosts - with copilot already being familiar with data structures, code style, etc. would be a big boost to accuracy. But also, third party code would end up being more similar. Code style of the whole world would be pushed towards 'Microsoft style', which probably makes hiring easier, less training time for engineers,…
You are assuming Microsoft code base is superior to Linux / Git / MySql / whatever else is in github right now. That is a .... big assumption. And if Microsoft's code ends up influencing the rest of the world code that would be a .... big downside.
IMO, the long tail of non-code-reviewed, written-by-someone-in-their-first-month-of-coding, barely-even-compiles noob code[0] in Github is going to be orders of magnitude larger than the long tail of crap in Microsoft's internal repos.
[0] Hey, everyone has to start somewhere. There's nothing wrong with your first "hello world" program being buggy - that's what being a beginner means. But it's probably not the sort of code you want to train an LLM on.