I don't know why they even chose copilot as a name to begin with and killed Cortana over it. They really went from one of the best known AI in fiction which happened to be a character IP they owned (and was their big Xbox flagship) to the most generic and lifeless name possible. They could've just introduced Coftana as having a new "copilot" mode. At this rate the next gen Xbox is going to be named "Xbox Copilot".
Yes, dropping the Cortana name is objectively bad marketing, as far as I can tell. It's possible MS has some hard data to the contrary, but here's how I see it:
1. If you can personify a brand, that inherently generates added brand loyalty. It is a sociological fact that people feel more attached and are more loyal to a personified brand than a non-personified brand. This is why many brands add mascots. So, all else being equal, Cortana is a better brand than Copilot.
2. Some users (admittedly not many) were particular fans of and loyal to Cortana based on experience with her in Halo games or just legacy fans from Windows Phone. On the other hand, I don't think there was any real "hate" for Cortana from a cadre of users (if there were, then ditching Cortana may be important, and maybe I'm wrong on there not being much negativity around Cortana). Therefore, keeping Cortana would hold the Cortana fans with no branding downside.
3. Cortana served as a personal assistant and pretended to be an AI. There was a general expectation that her AI capabilities would grow over time (obviously). E.g., Apple has not replaced Siri with a new brand every time Siri got smarter.
4. Copilot, in contrast to #3, lacks the personal appear that Cortana had. Maybe not important to ask for a joke or general chat with Cortana, but for those who enjoyed those features, those fit with the established brand of Cortana and kept it as a viable competitor (in terms of features) to Siri and Alexa. Removing or weakening that immediately moves Copilot into a distant, less desirable option compared with other personal assistants.
On another note I just dislike copilot being shoved down our throats in every Microsoft product. Microsoft is so desperate to force the next big thing with AI, but they're basically just ensuring that they'll make everyone sick and tired of it. The foundation of marketing is that marketing creates value where there's just a a product by engaging with consumers, discovering their problems, and selling them products as solutions to their problems. Where has any of that been with copilot? Microsoft themselves sure are insisting that AI solves all our problems, but they haven't really taken a second to actually let consumers themselves make it clear what problems they have and how this new product (copilot) could provide them value. Marketing is apparently the bane of Microsoft's existence.
As much as I agreed with your other comments, I must partially disagree with this piece. MS is genuinely under intense pressure from Google (and others to a lesser extent) on AI. They believe they need to be first here, lest they lose the market (and they may be right on that). As long as they are adding these as features we can use and not taking other things away, I don't really see much of a downside (at least not objectively, but I would agree that MS has gotten a bunch of bad press and marketing consequences). And to the extent some users become accustomed to using these features, they will see added value in MS' services.
The only thing I see that has actually been taken away from some users: the Menu key on some laptop keyboards (many already didn't have it) to replace with the Copilot key. But Shift+F10 still performs that function. Clumsier for sure, but with smaller laptop keyboards, that's been the case with many laptops long before Copilot.
I use Copilot now for general information many time every day. If I want something like the etymology on a word, to lookup up something in reverse or hard to find via a regular Internet search (e.g., what is a word that means XXXX or who are the presidents who did not YYYYY), or for complex combinations that are impossible to do via traditional Internet searching, those are the kind of routine matters that Copilot is amazing at and I have now officially become dependent on it. Great advance in information access that wasn't available to me a couple of years ago.
And I don't know how many people use it, but I actually find the voice mode of Copilot on Android to be amazing. It really is like having a conversation with a knowledgeable person. It should still be called Cortana, but the way it works now is incredible. You can ask it any question and it will answer. Then you can continue with follow-ups or clarifications, all by voice in a casual conversational way. It uses my name to address me. It's friendly. Sounds so natural, I can't tell at all that it's computer generated. Sucks that it can't DO anything (no interaction with device or other apps, they need to build their own phone or partner with someone for that), but for information it can provide, it's incredible.