Believe it or not, this is not entirely true. Yes, Microsoft do have money and yes they do have thousands of good programmers, but I can guarantee you now that the people behind Windows Defender are most likely not the same ones who are doing work on the actual Windows OS Kernel (which is where all the Windows Internals will come into play).
The most powerful thing I have seen Windows Defender do is protect it's processes from kernel-mode, and they also utilize kernel-mode for some other things, such as monitoring the file-system for file write attempts, etc... But that doesn't mean the programmers there are familiar with windows internals like some employees from other vendors who literally spend all their time reverse engineering and studying it.
I bet most of the programmers there are only familiar with Win32 API (user-mode), and then they probably have a small percentage of developers with a kernel-mode development skill-set... They also probably use freelance hire, who knows.
I mean I could be wrong, who knows? But I highly doubt that even a majority of the WD team will be sophisticated with the Windows Internals, the people who will have experience in that will be the ones behind the kernel development, or the user-mode NTDLL wrapper, etc. Then again, they probably all work together... I am not sure as I do not work there, but maybe I should.
It would cause too many problems. Beginner users don't want alerts telling them that a process is attempting to inject into another, etc... They aren't used to this. They wouldn't understand how to respond to the alerts properly, especially in the case of a false positive.
People who change to products like Emsisoft usually know a bit about what to expect and what they are doing, others stick to install and forget products like Avast, AVG and Bitdefender where it'll auto-block new detected threats without the user needing to have experience with BB/HIPS, sandboxing and the such.
Not to mention that if they implemented such functionality, there would be an increase in performance reduction.
They can definitely compete with other "top rated products such as Kaspersky, Emsisoft, etc.". The problem is the expectations; in reality Windows Defender is more than enough for primary protection alongside User Account Control and SmartScreen (all built-in to Windows 10) as long as you are careful and make good choices. Then again, even with the other vendors' products which have all these fancy dynamic protection components, you'll become infected regardless if you are not careful and make good choices... Mathematics is all worked out there.
If you are a user who needs a sandbox/virtualization, Behavior Blocker/Host Intrusion Prevention System, etc... Then go for another vendor, feel free. However Windows Defender is pretty good for simple protection, which is all that is really needed with the other built-in protection components and a bit of brain.exe.
Just my 2 cents/personal views, take it or leave it.