Q. Is this really as harmful as you think?
A. Go to your parents house, your grandparents house etc and look at their Windows PC, look at the installed software in the past year, and try to use the device. Run some antivirus scans. There’s no way this implementation doesn’t end in tears — there’s a reason there’s a trillion dollar security industry, and that most problems revolve around malware and endpoints.
If you’re suspected of something and law enforcement can get a subpoena, you’ll have to hand over the contents of your microsoft keylogger, actually microsoft will hand over your contents from their keylogger.