Well, this might be a solution to Windows Update taking ALL of the bandwidth on lower-bandwidth (15Mbit/sec) connections for itself, interfering with streaming radio, mining software, YouTube, etc. (Which I have personally experienced.) IMHO, this is a much-needed addition.
The idea is good, but Windows should be able to either ask for or detect connection speed before setting this limit. Perhaps ask if you want to download updates at full speed. At least detecting when there is user activity, and prioritise that. Bulk download should always be the absolutely lowest possible priority.
This isn't a problem if you leave your PC running 24/7, it'll eventually download. But I don't know many people who leave their laptops running overnight. Then there is the problem of battery power. Windows deciding to download and install a major update can already wreck battery life, there is no reason to string out the download itself further then necessary. What happened to hurry up, and get back to idle? (This is why you should always set "pause updates" on a laptop when you need battery, but most people are unable to do simple things like this)
Just curious, what sort of router are you using? I can't say I've had trouble in the last 10 years with downloading interfering with browsing, streaming or anything else while downloading. Even back when using a slow-as-molasses Asus RT-N12D1 on a 6/1Mbit ADSL connection.
I agree. I have a few customers on such slow Internet connections (e.g. 0.5 mbit/sec) that in order to use their computers, I've had customers using the 'metered connection' or 'pause updates' options until after they've finished using their computer, then to leave it running. Otherwise the computer is unusable on the Internet.
On such slow connections, that is really the only option. Adding an adblocker is also helpful, if you haven't already. Cuts down on unnecessary downloads.