To be clear, I don't work for Microsoft and I think they should use parameter encryption.
But I can offer a plausible explanation - one being of complexity. The component that takes in the user password or PIN is a bootloader component. To use encryption, the bootloader component would first need to verify whether the TPM is genuine or not, it needs to keep a secure copy of the Certificate Authorities (CAs) of all TPM manufacturers - it is straightforward to bundle these into the bootloader, but updating the bootloader later on to add new CAs is awkward to maintain. With the CAs in place, it then needs to validate the X.509 certificate chains of the TPM EK chain to see if it matches a trust anchor. Then, the bootloader needs to include expanded cryptographic capabilities because encrypted sessions require a lot of extra steps. Expanded cryptographic capabilities obviously increase the attack surface of the bootloader. They would likely also have to support both 1.2 and 2.0 methods, which is also extra complexity.
This is the only reason I can think of that explains why it's not done - but it does not excuse the threat we live with today.