That's probably a safety precaution but if it is like you describe it is also a risk. It could be a safety precaution to make sure that accounts do not eventually become compromised in the case of deceased person.

But if the account is deleted entirely that could indicate the address can be re-used and in that case any password reset mails and other important email might land in the new owner of the address' inbox.

Wasn't that true before the Hotmail -> "Outlook" transformation? I.e. a Microsoft free email policy that as jacquesm notes could have good reasons behind it.

It's always been that way. In fact, I'm almost certain the time was shorter in the early days.