That's an argument for free as in beer, not free as in speech.
But I'd say that's a pretty niche scenario. In over 20 years of PC use I can't say that I've ever come across it, either personally or seeing a friend or colleague go through it.
I think it's less niche than you say. Instead, there's been an entire culture built up around avoiding windows licensing. Non-technical users have frequently asked me for 'free' windows, and many folks know they have pirated stuff but avoid the security upates because they know it'll break their licensing. Others have Windows installer discs that are pirated but valid - 'free, working Windows'.
For the most part, it 'just works', but it's not doing so in a legal way.
That's different though. The first example was someone who thought they'd bought a valid license but had been duped. This one seems to be about people who want Windows but don't want to pay for it.
Those people need to do a total cost of ownership assessment and work out whether they go with something FOSS or something closed. While FOSS is great in cash out the door terms if you value your time it may not be as good a choice.
But again both are scenarios around free as in beer, not free as in speech.
* Incidentally, I should note I'm not against FOSS. I'm typing this into Chrome and I work for a company who build their products using Java and JBoss and who run an extensive Linux infrastructure. For us those have been great decisions but for my family who are not IT literate, I think the FOSS assessment looks very different.
But I'd say that's a pretty niche scenario. In over 20 years of PC use I can't say that I've ever come across it, either personally or seeing a friend or colleague go through it.