Its violation of the EULA, which doesn't need to be illegal. For example, it maybe financially advantageous to break a EULA and pay the fine and it won't be more illegal than your plumber messing up.
This is to say that MS can peruse you, but the government won't peruse you because you didn't violate the law of the land.
I really liked the breakdown offered by David Madden, who is more of an expert than I.
There's a whole lotta issues in your question, so it's impossible to
give a definitive answer. Some EULA terms are simply unenforceable
(for one reason or another), so nothing will happen to someone who
violates those terms. Some EULA terms are enforceable, but only on a
contract basis, so if you violate them, you'll probably only have to
pay money damages, and/or lose your right to use the software. And
some EULA terms may connect to copyright, so violation of those terms
would constitute copyright infringement. Of these, only copyright
infringement is actually illegal. It's even possible, but not common,
to go to jail for certain types of copyright infringement.