Let's put this a different way.
Suppose you have a football team with only 11 resources. And suppose they have a "zero tolerance" of any apparent threat made by the other team. So EVERY time it looks like the ball is handed to a running back, they blast in for a tackle on that guy.
This football team is going to lose, and they are going to lose because they cannot distinguish *apparent* threats from *real* threats. The *real* threats are constructed to not look like threats in the early stages of execution. Or they rely on a shifting of resources by the other team to deal with a fake threat while the real threat goes unopposed.
Terrorism and flight safety are very much the same sort of situation. If you are not dealing with real threats, and wasting your resources on trivia, you are not doing your job.
When you "buy" Windows, you don't purchase the software. You purchase a license to run the software, on a particular number of machines (1 for the typical home user). Included is the installation media for your convenience.
If you have a license for a product, and are running it, I don't see how Microsoft could have a problem with this. They could have an opinion, but no legal basis and certainly no way to enforce their opinion.
They would have to say the "license" is simply a suggestion, and that they are selling you a specific product like a chair, such that when it becomes broken it is no longer functional, or up to you to repair. They will never do this, for many reasons. Selling a physical product means you can disassemble or alter in any way you see fit, like evening up a table's legs, which they don't want you to do to Windows. Re-selling your license (validly, e.g. by wiping your drive and switching to linux first) means they have to activate the OS on a different machine, which adds support costs, so they'd prefer you not be able to re-sell, or at least think you can't. So many reasons, but they will never sell you a physical product.
As long as you have a license, and are following it by not installing on more machines than is allowed, I don't see any loophole. It has to be legal. Of course, this depends on what you did to pirate it, so you have to be within the bounds of DMCA laws if applicable, or if your locality recognizes EULAs you might have to follow an "original media" clause, but if that's the case you just call Microsoft and say you can't use your product because the disc went bad, and they refuse while trying to get you to buy a reduced-cost license to ensure you're legit, and you have a good old-fashioned lawsuit.
Since a lawsuit involves court costs at a minimum and lawyer's time most likely, it seems biased against the average user that they would have to go through the legal system to properly obtain what they paid for. That is the key to this whole WGA mess in the first place, when WGA called you a thief even when you aren't. And you are denied usage of something you purchased. It's cheaper to buy the compliance license than fighting in court individually, so I don't get why this wasn't certified class action instantly. Probably just a poorly thought out argument, which the judge shot holes though.