Can you point to me which AAA devs did Microsoft make to "produce jack shit for 5 years now".

I'm guessing you're referring to the triple A devs Microsoft already had 5 years ago (343, Rare, The Coalition, etc.) not any they acquired recently.

The issue is that Phil Spencer inherited few first party studios with those studios having poor leadership in them. Phil has had a "hands off" approach since he became the head of Xbox. Now, normally that would be seen as a good thing, but with poor leadership already plauging the companies they already had, having a hands off approach does not really do much.

Microsoft acquiring more studios is the only way to bolster their first party games without compromising on their hands off strategy. Something that I am sure you are aware the current head of Activition does not do with their gaming studios.