As far as I can tell, this does not allow the employer to see whether employees were idle or not. It does allow tracking of how much time they spent in meetings and how many chat messages they sent.

Why are you focused on idle time? You don't think a LLM can try to answer other questions?

Do you think Microsoft will prevent their paying customers (the companies) from querying, "What is the strongest legal reason to fire <person> based on the past three years of activity on this computer?"

Their sales team would be absolute fools not to point out how much easier it makes it for a manager to see historically whether someone is performing tasks as they are specified in some formal handbook.

The difference between doing that for reasonable reasons and doing that for post-hoc justification of targeted reprisals is in the mind of the manager and nowhere else. Maybe unspoken, but incredibly obvious.

"Give me the man and I will give you the case against him."