I'd say that the 'modern' era of Microsoft Enshittification started with IE4 as well as Windows 98. The Channel bar put ads on the Windows 95 & 98 desktops. It was easily disabled, but even that far back, Microsoft was starting to work on making their stuff suck just that much more.

Next was Windows ME blocking DOS access, while still running on DOS, making the OS a bit ... unstable, followed by your point of Software Activation in XP.

Fun fact, there were still computers being manufactured with CPUs that don't support Windows 11 in 2020, got one of those at work that we will need to replace before then. Thankfully only one, so it's not too big of a deal.

When this happens, Firefox has been updated in the background & the non-updated parts that're loaded into memory attempted to load one of the updated parts & found that they were no longer compatible, causing this message to appear.

At this point you HAVE to restart Firefox in order to be able to use it, no way around it. Soooo very fun on Mac & Linux since both can update in the background. It's also possible to have this happen on Windows, but it's far more rare as it seems to require having multiple different instances running at once.