The encryption key is much longer than the typical password, and people often use password managers to store website login, so I think it is reasonable to assume that they can forget the encryption key and remember their microsoft account login.

Anyone that does get the login for that MS account can decrypt the laptop, but often times they don't have physical access to the laptop (say some hacker who does not know you personally). If they let people around them get the credential, I think it is likely that they will let others get the encryption key even if it is not saved on the cloud.

And I think backup using the cloud is a nice option, although it would be better to have a master password that you remember and doesn't require writing it down physically. That way people having access to your cloud will not be able to read it, and you still have it when your house burn down (which does happen for some people...).