They actually didn't update it at all. The Notepad app that ships with Windows 11 (and recent Win10 builds) is actually a completely rewritten, bloated, UWP (aka "Modern") app. The old Notepad is now an "optional feature" that needs to be manually installed.
To be fair, on modern systems it does open quickly in spite of it's size (probably because most of the shared libraries for UWP apps are already loaded in memory). And at the moment, the new Notepad doesn't offer any additional features which are common in heavy duty editors, so the "bloat" is mostly from an engineering standpoint. Well, I guess with the recent unwanted addition of Bing search, we're now starting to see signs of actual user-facing bloat.
Hey, it also has tabs on Windows 11, which is a very useful feature! It's the only thing I find myself missing when I move from my W11 work laptop back to my W10 home desktop.
Notepad++ is nice, but a bit bloated IMO. I'm personally a big fan of Notepad2 and Notepad3 - they're just standalone portable EXEs which don't need to be installed. On most of my installs, I replace the OG notepad with this, so when I type "notepad" from the run dialog, it launches Notepad2.
Sublime Text is really good too. It is a paid app but the free version just has a message suggesting you might want to support them by paying that pops up every 10 manual saves. And you don't need to save more than once per file since it autosaves on every character. WinRAR style basically. I rarely see the message myself.
Iirc, the original meaning of Word Processor required formatting, which Notepad doesn't do.
But otherwise yeah, this is a non-story. No one uses Wordpad or wants to use Wordpad. Let's focus on the egregious privacy concerns of Windows instead.