The same reason any personal projects (and not using it to diminish what linux projects are but to say that the people working on them do it because they want the project to progress, not because of any financial incentive) can do better then commercial projects: where the passion is at.
Someone just looking to get paid is more likely to say "ok this is good enough" and move on to the next thing. They are more likely to have managers breathing down their necks to get something done by some arbitrary deadline, too.
It's why indie games have been able to compete with AAA games. The latter are following a formula to get paid, plus are more willing to make compromises in the name of either saving costs or increasing revenue. The former just want to make their fun idea reality.
Also, MS has invested a ton of money into AI and seem to be getting desperate for a return on that. Which means there's a certain amount of denial about the quality. It's not just a tool to them, but a tool they desperately need to work and prove it's worth throwing a ton of money at.
But for anyone that it's simply a tool for, it can be useful. They are great rubber duckies. Like my last interaction with one was a case where it did horribly and was completely wrong about what "we were discussing", but I still got to the right conclusion despite it because going through the conversation helped me think it through.
And though it makes a lot of mistakes, its feedback isn't always wrong. The fact that it can rehash previous things from its history means its good at spotting new instances of problema that have already been solved. So accepting bug reports should be fine, just with the understanding that they each need to be looked at and some reports will need to be rejected because they are wrong.