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The most concerning thing to me is the fact that they can ban users from playing on their own servers. Moderation should be on the server owners imo. Microsoft being able to ban someone from their own server that they self host or pay to host via a third party is a big issue.
That being said, I don't think that Microsoft's moderation has been as apocalyptic as a lot of people made it out to be. It's just the principle that I take some issue with.
Just set the server to offline mode...
That's a security risk because users can log in as other users. Regardless, if you paid for the game, you should be able to play on third party multiplayer servers.
True on the risk aspect, there are authentication plugins you can get instead on the server side.
On the ban aspect, I don't see people making this claim for Steam, if you get banned on Steam you lose all your games, not just a $30 purchase, and maybe don't call people slurs in online text chat? Idk, it seems like it was just an overhyped concern with few actually getting banned that didn't deserve it somewhat.