I get what you mean, yeah that's a problem for game pass games, they seem to think everyone is going to install apps on their main drive and it will be wiped once they reinstall Windows, without accounting for those installing have in external drives, so when you reinstall Windows and the new user has no rights over previous user files, you can't touch them until you wipe the whole disk.You said you don't have a Playstation. That's what gets peoples back up around here. You'll learn soon enough how things work on here: Don't say anything negative about Sony/Playstation. That way you won't get laughed at or banned.
So how does it install the games?
I don't trust Microsoft because anytime I've tried installing games from them on my PC (that wasn't through Steam) my SSD gets fucked and I need to delete everything off it for it to work again.
It's shit and had too preemptive solutions: Uninstall everything before reinstalling windows or use a drive or partition only for game pass in case you still have to wipe it.
BTW OT: Honestly seeing someone on PC not on Game pass within my circles seems weird, whenever something is releasing it is there and someone wants to play it is like "Oh it's on game pass", assuming we're just all subscribed to it lol