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Trademarks can apply to different areas. In this case, Microsoft's trademark is for services related to online chat and gaming, not for something like a window manager.
https://tsdr.uspto.gov/documentviewer?caseId=sn76041368&docId=ORC20030304054014&linkId=20#docIndex=19&page=1
Makes sense I guess. Somehow also makes the trademark even more absurd.
Reminds me a little of Apple v. Apple Records, and how Apple promised never too use their brand to enter into the music industry (like they later did with iTunes anyway).
In 1991, Apple Computer made an agreement to pay Apple Records $26 million in exchange for letting Apple Computer use the "Apple" trademark for music. But that was long before iTunes, they wanted the Apple trademark for their computer chimes. Apple Records agreed to let Apple Computer use the Apple trademark for music as long as it did not "package, sell or distribute physical music materials."
Much later, iTunes was developed and Apple Records sued Apple Computer. Eventually a judge sided with Apple Computer, pointing out that iTunes did not package, sell or distribute physical music materials. Thus, Apple Records couldn't get another bite of that Apple....