The User-Mode Driver Framework is a thing. Most plug-in devices do not need (or have) a kernel-mode driver.

Yes, but unless all 3rd party drivers can run in userspace (which is not really feasible), Microsoft needs to give vendors the option to install a kernel driver, at which point a vendor can always decide to ship a kernel driver and bypass any restrictions.

Imo, the only thing Microsoft can meaningfully do here from their side is threaten LG with pulling all their drivers if they keep doing this.