Either windows’ or windows’s is correct, actually. The reason is because of exactly words like “Windows”, if you use the former, it sounds like it’s a possessive of more than one window, but it’s a possessive of a proper noun, Windows. The latter is more correct in this case because of that. (it’s also pronounced that way!)

Yup. All of that is true. It also protects you from yourself by preventing you from making changes outside of the home directory so you can’t hose your system accidentally. It’s intentional.