They do actually build internal tooling! They key is that it’s actually good enough that feedback to the limited, targeted, and quickly actionable. Microsoft’s internal was immature enough that the general feedback you’d always have is “this is unusable”, which is something the teams building the tools could probably figure out themselves before making the whole company spend time beta testing the tools.

The main point is that the tools need to be of a certain quality/maturity for dogfooding to be effective.