This particular case was discussed at length on Reddit and on YC News. The general consensus was that the Microsoft developers simply didn't have performance in the vocabulary, and couldn't fathom it being a solvable problem despite having a trivial scenario on their hands with no complexity to it at all.
The "complaining developer" produced a proof of concept in just two weekends that notably had more features[1] and was more correct than the Windows Terminal!
[1] Features relevant to the debate at any rate, which was that it is possible to write a high-performance terminal renderer that also correctly renders Unicode. He didn't implement a lot of non-rendering features, but those are beside the point.
The "complaining developer" produced a proof of concept in just two weekends that notably had more features[1] and was more correct than the Windows Terminal!
RefTerm 2 vs Windows Terminal in action: https://www.youtube.com/watch?v=99dKzubvpKE
Refterm 2 source: https://github.com/cmuratori/refterm
One of the previous discussions: https://news.ycombinator.com/item?id=27775268
[1] Features relevant to the debate at any rate, which was that it is possible to write a high-performance terminal renderer that also correctly renders Unicode. He didn't implement a lot of non-rendering features, but those are beside the point.