How would an OS vendor solve issues, there you go....

I feel sorry for people working as developers on MS Windows. They have so much talent and new ideas waiting to be realized only to be trumped by requirements of backwards compatibility with 25 year old totally broken and braindead code.
Yes, another ongoing "trick" :)
Yes, but it's analogue to: try to create /dev/null directory/file under /dev/. While you can do it you know it's not wise at all.
Going back to DOS stuff it's understandable they kept the backwards compatibility. Especially con as it can be used in scripts.
Yeah, there's a whole bunch of different 'reserved' words. I'm actually not surprised 'user' is now one of them. They can crop up in all sorts of situations, usually when you least expect it. Things get especially interesting when other operating systems are involved that don't have this 'restriction'. Think about sharing files between Windows, OS-X, Linux, BSD. Perfectly fine files on one OS turn out to be lethal on others.