Gaming

https://www.youtube.com/watch?v=mf5Uj4XIT1Y

Basically, preordering incentivizes companies to release games that are not finished. In general, companies will always maximize revenues while minimizing costs. If they can release a game that didn't cost them as much to produce (getting massive preorders through good marketing but pinching development and quality) then they absolutely will. look at any AAA released this year

It's a digital good, there's no scarcity and a lot of them turn out buggy or just bad.

IMO it's generally not a great idea to pre-order anyway because it's not like they can ever run out, plus you never know what's going to happen on launch day. The game could be a big mess like Cyberpunk was, or the servers could go down because everyone's downloading at once so then there'd be no point paying to get it on day 1 anyway.

And on top of that, Bethesda has a bit of a reputation for putting out games that are... let's say unpolished on release day. I usually find the best approach is to leave it for a day or two, see what people are saying about it online, and then pick it up if you really want to.

Why are people buying products that they can't even have until release day?

I think one reason is that Bethesda's previous game's, Fallout 76's, release didn't go very smoothly. Not at all smoothly. Internet Historian has a good video about that: The Fall of 76

That and preordering a digital product that literally can't run out has no benefits.
You just put down money for something without any idea what you're getting.

Preordering physical copies used to be a thing because shops would run out of them.

It's literally pointless. You are getting no benefit. You can buy it when it releases.