Word actually supports automatic hyphenation, but you have to turn it on (it’s a property of paragraph styles IIRC).

Thanks! I heard of that.

Of course, in practice approximately no one ever does that.

It is being done in business environments where people actually care how documents look like. It may be a small portion of Word usage overall, but it isn't totally rare either.

Oh, definitely. Microsoft likely put that feature in because there was some demand for it from some important enough customers.