If I had to guess, the team that made probably could have dealt with the group that "owns" and gone through all the security, functionality, routing and systems testing involved to add a new subdomain or root-level path, but it was faster, easier and safer to just use a new domain and not worry about 25 years of domain name baggage. In a giant org like Microsoft, services are launched by different groups at different times, and not always (or better said, rarely) in a coordinated manner. In addition to what others said about cookies and security, there's also organizational issues as well.
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