If Microsoft buys Activision, wouldn't they then be funding Activision's development? The major difference here appears to be looking at a deal in foresight vs. hindsight.

Let me put it this way:

Sony funds developers = PlayStation gets “extra” games that otherwise wouldn’t exist. No one else is affected.

Microsoft buys Activision = long running Activision franchises (eventually) become MS exclusive. Xbox gain nothing but everyone else lose out on franchises they used to enjoy.

Different steps to achieve the same outcome (buying a game company). Why should I, as a consumer, give a shit on the “how”?

Not quite the same outcome.

One brings into existence games that probably wouldn’t have been made otherwise - and the investor takes the risk of the game bombing.

The other is primarily to deny the competition access to long running popular franchises - and is practically risk free since those franchises are almost guaranteed to print money.