I edited that you can switch to local AFTER you make an inital setup with an MS account, so no, Microsoft still let people use it without, they just hard trying to filter more people in, shaddy, but it's in their interest to give the full Windows 11 experience to normal users with the store and all that stuff.
It still feels like an unnecessary coercion with jumping through hoops and I doubt allot of W11 users will be aware of the workaround.
On W10 at least, you can select specific apps to login to, such as the store without affecting the wider OS.