However, while it's illegal to run it on 4 PC's, there is nothing that would stop you from doing it. Microsoft does not disable keys unless they think it's been leaked on the internet and you get a large number (hundreds or thousands) of users activating the same key. Even then, any computers that have been previously activated do not become deactivated. I know this for a fact, as I've been in companies where they violate the license and use the same key to install dozens of PC's.
I'm not advocating that anyone do this, but the fact is, Microsoft can't know how many PC's are currently activated on a single key. There is no official "de-activation" process. So they have no way of knowing if you have removed it from your old PC or not. Especially if the PC is not connected to the network, or firewalled (as many corporate PC's are).
Microsoft knows that if they try to enforce activation too strictly, it will backfire on them. They have to walk a thin rope and give users the benefit of the doubt in all but the most egregious situations.
Microsoft has *NEVER* deactivated an OS that was previously activated, and they're not going to start now. So please stop with the tin foil hat theories that have no historical basis to support them.
You see the process of installing Win7/8.x on the second PC, and then doing a second upgrade as "transferring"; I see it as "reinstalling". To me "transferring" is the process of taking what's on the first machine and copying it (in this case, the Win10 installation), to the second machine -- and that clearly is NOT being done. You're not actually copying the first install to the second machine; instead, you're reinstalling from scratch -- starting with Win7/8x and then doing a NEW upgrade to Win10.
My guess is that the presumption is, since the original Win7/8x key was retail, not OEM, when the activation servers see the same license key a second time, but with a different hardware hash, they're going to OK the activation of the second PC.
And, that could very well be the case -- I won't dispute you on that; I'd just like to get confirmation from someone who has actually done this -- not quotations from a EULA, which might not hold up in actual practice.
Sounds like hair splitting to me.
One qualifying installation of Windows 7 or 8 can be upgraded to one copy of the equivalent Windows 10.
If you take that same Windows 7 or 8 and install it on a different computer then upgraade it to Windows 10, that is flat out illegal.
I don't care how you phrase it or if it's retail or OEM, it's illegal.
How can you possibly say it's anything else.
Will you be able to do it? Probably. Will it activate, probably. Is it legal, no.
You really don't understand licensing?
From the EULA:
Stand-alone software. If you acquired the software as stand-alone software (and also if you upgraded from software you acquired as stand-alone software), you may transfer the software to another device that belongs to you. You may also transfer the software to a device owned by someone else if (i) you are the first licensed user of the software and (ii) the new user agrees to the terms of this agreement. You may use the backup copy we allow you to make or the media that the software came on to transfer the software. Every time you transfer the software to a new device, you must remove the software from the prior device. You may not transfer the software to share licenses between devices.