There are two types of Windows 10 activations, product key and entitlement. Product key is pretty much the same as it always has been and applies when you have actually purchased your own unique product key for Windows 10. If you purchase your own unique Windows 10 product key you have to enter it each time you install Windows 10 and that provides your activation. But that isn't what you are really asking about.
The other activation is a digital entitlement that is stored on Microsoft activation servers and has nothing to do with having a Microsoft account. The digital entitlement is created when a previous Windows 7/8/8.1 is upgraded to Windows 10. With the new November update to Windows 10 the entitlement to upgrade to Windows 10 for free can be verified in several ways.
The first way is to do an in place upgrade of an installed Windows 7/8/8.1 (either via Windows update, or by a downloaded Windows 10). During the upgrade a program called gatherosstate is ran on the previous operating system creating a file called genuineticket.xml. This xml files carries over to the Windows 10 installation and that file provides the initial request for activation that gets passed to Microsoft activation servers along with a matching unique computer hardware ID. The Microsoft activation server grants the activation and stores it along with the unique computer hardware ID. The hardware ID is calculated by Windows 10 and each computer (each motherboard, really) will have a unique hardware ID. That is how activations get "registered", not through your Microsoft account.
The November update allows an activation to be created by the product key alone from Windows 7/8/8.1. The product key can be entered manually, or Windows 10 can read a product key stored in computer bios during installation. When Windows 10 activation is requested by using a Windows 7/8/8.1 product key, that activation request is passed to Microsoft servers as a digital entitlement request just like the in-place upgrade activations are and the activation is granted and stored by the Microsoft Activation server along with the matching unique hardware ID. Nothing physically happens to the Windows 7/8/8.1 product key after upgrading to Windows 10. You are still able to use it legally in accordance with the previous EULA (License Agreement) and the Windows 10 EULA (IE, can't use the old Windows 7/8/8.1 and the new Windows 10 at the same time). But Microsoft does not deactivate the old Windows 7/8/8.1 product key in any way.
When you get a digital entitlement through an upgrade you do get a Windows 10 product key, but it is generic. Everyone gets the same product key for the same version of Windows 10 coming from an upgrade. There is one good use for the Pro generic product key. If you have a computer that originally had Windows 8 Home and the product key for Windows 8 Home is stored in bios and you purchased the Windows 8 Pro upgrade. If you do an in-place upgrade from Windows 8 Pro to Windows 10, you will get Windows 10 Pro just like you should. BUT, if you later do a clean install of Windows 10 on the same computer, the first thing that Windows 10 will use is the Windows 10 Home product key stored in bios and you will get Windows 10 Home installed and activated based on the product key in bios. Currently Windows 10 Home will not accept the Windows 8 (or 7) Pro product key to upgrade to Windows 10 Home to Pro. But it will accept the Windows 10 Pro generic product key to trigger the upgrade. Then the Windows 10 Pro will go to the Microsoft activation server and retrieve the previous activation for Pro stored on it by sending the unique hardware ID and matching it with the hardware ID already stored there.
Now, fast forward to after July 27, 28 or 29, 2016. It is pretty much the motherboard that determines a computer's unique Hardware ID. We will call July 27, 28 or 29, 2016 "expiry" for simplicity, meaning the end of the free upgrade period. After expiry, when you do an upgrade from Windows 7/8/8.1 or a clean install of Windows 10 without a purchased and unique Windows 10 product key, Windows 10 will pass the Hardware ID of the computer (really the motherboard) to the Microsoft activation server and if there is a matching Hardware ID with an activation stored for the same version of Windows 10 (Home or Pro) the activation will be retrieved and Windows 10 will be activated.
If you have a new motherboard that did not have a previous activation stored on Microsoft servers, the same activation request generated by Windows 10 will get sent to Microsoft activation servers. Since the unique hardware ID will not match one stored on the server, the server will deny the request for activation. At this point there will be two options for you. You can enter a unique Windows 10 product key to convert the activation to a product key activation. Or you can call Microsoft and they can grant the activation request approval. Whether or not Microsoft grants transfer of a digital entitlement to a new computer will be based on what they decide to do then.
All that happens on the expiry date is Microsoft turns off the ability of the Microsoft activation servers to grant new digital entitlements automatically and each new digital entitlement will have to be approved manually. All digital entitlements already stored on the Microsoft activation servers based upon Hardware ID and version of Windows will remain unaffected. Hopefully this cleared it up for you.
Currently there have been a few users who have contacted Microsoft with the concern of transferring their full retail Windows 7/8/8.1 licenses to Windows 10 full retail licenses. They have stated that in the future (after expiry) they should be entitled to transfer Windows 10 to new computers just like they would be able to transfer their old Windows 7/8/8.1 to new computers. Microsoft has responded to them by simply providing them with a unique Windows 10 product key that can be used to achieve product key activation of Windows 10 instead of a digital entitlement.
Regards,
Joseph Paul
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