Connection between local users and Microsoft accounts?

1.1 When you create any account [local of MSAccount-related], Windows creates a user folder within C:\Users so you'll see something like C:\Users\NewAccount within which you'll see C:\Users\NewAccount\Documents and other subfolders.
1.2 It folows that two users have different folders - C:\Users\Account1, C:\Users\Account2
1.3 You can learn to adjust the permissions to give users access to each others folders.
1.4 You can also 'relocate' users folders.

- This is most commonly done for those computers that have more than one drive in them - one is thought of as the OS & applications drive whilst the other is thought of as the Data drive.
- If you relocate then you can decide what folders to create on the data drive and what access permissions to give them. Personally, I just created a single set of folders on my data drive and allowed all users to have full rights over them [so user1 could delete files that user2 wanted to keep].

1.5 "Maybe this example will help explain what I mean" - Users' data stays where it is unless you deliberately move it. In your particular example, you would be asking Windows to duplicate Berry's account and it would refuse to do so.
1.6 "Would it be more logical or indeed necessary when changing Apple's sign in to use an email address which will be different than that of Berry or Cherry?" Yes, necessary. Apple's data would stay where it was.

2.1 When you reinstall, all user accounts on the computer have to be recreated.
2.2 When you reinstall, you click on the skip button when you are asked to provide a product key. Windows will then go online after installation has finished, check for records of activation for this hardware [CPU, motherboard, network adapter, ... - but not hard drive, that can be changed at will] & this Windows 10 Edition [Home/Pro] and re-activate. No MSAccount is needed for this to happen.
2.3 The benefit of linking an MSAccount to activation is because MS let you change more of the hardware yet still re-activate.
2.4 There's more guidance about this topic in Link Microsoft Account to Digital License for Windows 10 Activation - TenForumsTutorials

3 Do bear in mind that there is only a need to use an MSAccount if it benefits you. I only use local accounts.

4 Whatever account-related decisions you make, ensure that you have one [or two] password-protected local Admin user account[s] in addition to the accounts you use for day-to-day tasks.
- And write their passwords down somewhere secure yet accessible [I use one of the little cylinder dog-tag things on my keyring].
- You will use one of those additional accounts to log in if your normal accounts are messed up [or, in the case of MSAccounts, if MS messes up].
- I use one of mine for troubleshooting and I keep the second unused so I know I cannot possibly have messed it up.

Denis

Fortitude said:

I'm the only person using my laptop and I suppose the idea of having all users on it access a common group of files would be logical. I only use a standard user account for daily activities and the other two accounts which are administrators are dormant. Therefore if any data were to be compromised, for example by malware, that would be my data. Is there a tutorial on adjusting permissions?

In your circumstances, you don't need to do anything. If you ever decide to use one of those dormant admin accounts for troubleshooting or anything else, they can authorise their access to 'your' folders just by going to them in File explorer then saying Yes to the access challenge they will get.
For future reference, the tutorial index is at TenForumsTutorials

Fortitude said:

My laptop came with Windows Home. Before that I had a desktop that was running Windows 10 Pro. The desktop was actually scrapped after it had a fatal breakdown. I nearly had a mental breakdown at the time because of that unexpected dramatic event. After I bought the laptop in replacement of my desktop I upgraded it to Windows 10 Pro using my Microsoft account for free.

You must have had a Retail licence for Pro and used that for the upgrade. MSAccounts do not provide any free upgrades.

Fortitude said:

I wonder, does a digital license accommodate more than one device?

- - - I know there is something about using it on more than one device but you'd need to look in the tutorials for assistance as I don't know.

Fortitude said:

Based on your comments, to be on the safe side perhaps I should create another local Admin user.

No. If you have two admin accounts spare at the moment then that is enough [many people would say only a single spare is enough]. I assume they are
- password-protected
- local
- with passwords written down somewhere secure yet accessible

I always write user account passwords down on a piece of paper that I keep inside one of those dog nametag cylinder things attached to my main keyring -

Here's a [UK] link for ID tags as an example - https://www.amazon.co.uk/Pet-Barrel-.../dp/B00DEB1JVQ There are lots of available choices but I bought ones that, like these, have a slot in the bottom for me to swing off so I can be confident they won't come apart accidentally while I'm out & about.

Denis