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I suspect they're not actually too fussed about people doing this for Xbox Game Pass.
I've essentially bought into the ecosystem for 3 years just before the Xbox Series S/X is released, so they've got another sale there almost guaranteed and they've removed any thought of a PS5. It also persuaded me to buy an Xbox One S at the start of lockdown.So they've certainly 'lost' a couple of hundred quid by my cheating to get it, but they've taken me out of Sony or Google Stadia's clutches for a while.
They limit your ability to redeem region locked products by your devices IP? What if you were on holiday or travelling? I'm surprised the company that makes the software running 80% of the worlds computers came up with such a basic solution. I assumed the account itself would be region locked like Steam accounts.