IMO, issuing a fake CA for one of the top (and highest risk) domains even once should be the end of that CA (and any other CAs managed by that org)

IIRC name constraints is very poorly supported by client software, so there are likely lots of clients out there that wouldn't even parse that restriction out of the cert, and happy accept anything singed by the CA.

.bz is the TLD for Belize. Brazil is .br.

States are themselves extraordinarily large IT enterprises, they generally want control of traffic and its transparency or protection, and they are large enough to get arrangements for that, though usually not this particular arrangement.

Large enterprises in the US generally have the same capability, but not loaded into operating systems by default (that is: Walmart's ability to do this on its own network in no way impacts you, who have never worked on that network).

E.g. identity verification. My state has a "qualified" certificate that can be used to sign contracts and basically everything else you can do in-person. When you can transfer you home with that, there are higher requirements on checking the identity of a person who gets the certificate.

That CA is not used for much else and is basically confined to our state. But it has to be in Windows, otherwise no other software could verify the signatures.

See eIDAS and other similar schemes.

Getting your CA into a trust store means that every machine using that trust store will accept your certs. It’s not really necessary for a government or corporation to have a public CA in anyone’s trust store unless they want to issue certificates that everyone trusts. If they just need their own machines to trust their certificates, they can use the management utilities that come with Windows and with AD to distribute an “enterprise root”, which only their machines will trust. This is how most large companies and governments do it.

So when they issue their certificates, you don't get that huge red banner? I belong to a small developing country and even with its tech illiteracy it has a CA. Now, of course, because that CA is not trusted by anyone, all government websites are red.

So that they don't depend on anyone else to have proper TLS for their state sites and for companies operating in their state.

Imagine if you don't have a state CA, and your relationship with the USA goes sour, and the USA prohibits all of their major CAs from doing business with your country, including Let's Encrypt. People in your country still use the internet and you still want to protect them from scammers pretending to be local businesses online. So it's important that you as the state can provide CA services and sign those certificates yourself.

Of course, in this scenario you wouldn't want to be relying on Microsoft to help. But the general principle is that any state who can afford it has a strategic interest in having fully self-sufficient Internet infrastructure, including DNS, CAs, IP allocation etc.

So they can mitm their own employees without annoying TLS warnings.

Legitimate, or illegitimate?

I feel confident in guessing that any net changes in Windows popularity have close to no relation to Microsoft's policies around trusted CA. The number of users who are worried about sketchy certificates being trusted by default are dwarfed by the number of users who don't have any idea what a "trusted CA" is but care about more "visible" things like UI changes, performance, and how hard Windows is pushing Edge and other things they don't want.

I looked at the graphs at Statista. I don’t think it’s so clear cut. Mobile OSs have pushed it down, but it seem to dominate PC market. Do you have a graph that shows its decline on computers, not mobile phones? Or in absolute unit counts?

You need to show statistics to prove that, not just throw the statement out there, possibly only based on the vibes on HN.