The transformative factor seems rather clear. People want the many altered things and consider it different enough to go out of their way to find it (despite it not reducing their out-of-pocket cost).
The nature of the work is that it is a tool rather than a work of fiction which is also in favor of fair use.
The amount taken is substantial, but it has already been ruled that even 100% taken can still be fair use. It also contributes a great many man-hours of work though which means it wasn't just a blind copy/paste either.
The effect on the potential market is the big thing here. MS would claim they lose money by not being able to spy on users or show them ads. However, their licensing scheme remains untouched which seems to indicate that theft is not a motivating factor. Considering the use of the new work, it could be argued that ads and telemetry would be blocked by a DNS filter anyway and no actual profit would be lost. Further, those people would have moved on to the free alternative Linux which is already the defacto standard for a lot of pen testing and event the license profit would be lost. Then there's the question about if collecting that data is even legal (I don't believe it has ever been tried in court) and how that would interact with the DMCA.
It really doesn't seem like a case MS would really want to go to court over.
This is a very charitable interpretation of fair use.
>The transformative factor seems rather clear. People want the many altered things and consider it different enough to go out of their way to find it (despite it not reducing their out-of-pocket cost).
Is it really that transformative? It might be from a user-privacy point of view, but if consider all parts of the operating system, it's negligible.
>The nature of the work is that it is a tool rather than a work of fiction which is also in favor of fair use.
This seems to be a misinterpretation of the law. That part of the test (https://en.wikipedia.org/wiki/Fair_use#2._Nature_of_the_copy...) was intended to prevent copyrighting of facts. In this regard, an operating system is probably closer to fiction than non-fiction. I'm not aware of any exception for "tools".
>The amount taken is substantial, but it has already been ruled that even 100% taken can still be fair use. It also contributes a great many man-hours of work though which means it wasn't just a blind copy/paste either.
Again, if you consider the entire operating system, even weeks/months of effort by a single person would be dwarfed by the millions (tens of? hundreds of?) of man-hours that went into making the entire OS.