The Out of Box Experience (OOBE), what Microsoft refers to as the setup process for a new Windows install, just received a significant update — it's now even more difficult to bypass restrictions in order to use a local account. For ages, people have employed creative tricks to circumvent signing into a Microsoft account before getting into Windows, but the company is making it increasingly clear that it's not an option to skip this part.
In the patch notes for Insider Preview Build 26220.6772, Microsoft explicitly mentions the removal of "local-only commands" and says these "known mechanisms" for bypassing online sign-ins are being addressed. It requires every user to log into their Microsoft account, or they'll end up skipping "critical setup screens" that will eventually crash the OOBE, forcing the user to start over. You must be connected to the internet throughout to "ensure device is setup correctly." This also only affects direct installs, not managed devices.
