If I understand the description correctly, microsoft still does this!
https://support.microsoft.com/en-us/windows/privacy/windows-...
This was in an era of much more limited upstream bandwidth. The p2p nature was obscured from non-technical users in some implementations. So on and so on. I'm sure there are plenty of writeups from that era detailing why it was a bad idea.
These companies already used capable CDNs to distribute patches. It was a way for them to shift their CDN bill onto their paying customers.
Not everyone has the luxury of fully symmetric internet connections even in this age. Yes, my uplink speeds are absurd when compared to a decade ago, but when I ratio it to my downlink, it's still slow.
I have no comment on residential proxies. Somebody doing something in my name is unacceptable to put it very mildly.