Assuming Microsoft employees are ravenously pouring over your private folders seems a little short sighted: reliable skin detection is fairly easy to accomplish, which given a folder full of photos testing positive, might get a sample flagged for review. From a cost perspective, it would make sense that the sample might not have been reviewed manually until he contacted support.
It may also have been something as simple as having too many images in the folder fuzzy matching the huge DB of porn they have (Bing and Google probably have the largest collections of all kinds of porn on the planet). This is easily done using e.g. scale-invariant feature transform.
Certainly no cause for "stay the hell away from Microsoft".
The issue here is that it's private content. Scan the stuff I make public, sure. But there is zero reason to be scanning private content- no-one other than me is going to see it.
The other issue is who is readily available to discuss this if it happens? How do I know my emails don't just go to someone who barely speaks the language? If my Microsoft ID was locked out that's quite a few services I wouldn't have access to.
Every service I've worked on doesn't look, because they don't want to know -- there's no business reason to know. Having this kind of knowledge about customer content is completely counter to the business goals.
An intelligent company will work to minimize disruption to the user. Affording the user privacy and turning a blind eye to this sort of thing goes a long way towards producing a usable product.
But, what if someone complains? What if this photo was public and resulted in a complaint?
Even then, the idea that an entire account should be suspended over a TOS violation is absurd. By all means remove the content. Perhaps even disallow uploads for a time, or even indefinitely. But a policy of disabling everything including unrelated services and purchased content smacks if ignorant product design and typical Microsoft hubris.
This is a great example of why their product services can't gain traction in the market.
I can easily imagine them scanning for certain filetypes, then displaying large pages of thumbnails for somebody to review. Porn would be readily discernable, and some would surely enjoy having this job.
At least in the early days Microsoft was known for having a large stash of porn on their network, and it probably wasn't just for academic purposes.
It may also have been something as simple as having too many images in the folder fuzzy matching the huge DB of porn they have (Bing and Google probably have the largest collections of all kinds of porn on the planet). This is easily done using e.g. scale-invariant feature transform.
Certainly no cause for "stay the hell away from Microsoft".