Short answer: No.
You can use Windows without activation. The main downsides are:
Other than that, everything works just fine updates, apps and performance, all still function normally.
Here are your options, from most to least expensive:
Buy a genuine copy from Microsoft
This is what Microsoft wants you to do. If you think activating is worth $100+, go ahead — I'm not gonna stop you.
Buy a Windows CD key from a third-party seller
These are everywhere, and many people use them. They work just as well as the ones from Microsoft, but the way these sellers obtain them is a bit shady.
If you're interested, check out this video by TechYESCity
Use an old Windows 7/8 key
If you have one lying around (or it's on a sticker on your PC), it often still works on Windows 10/11.
Use an activation script
These are getting more and more popular. They're free, simple, and work just as well as any other method.
However, it's considered piracy if you care about that kind of thing.
The most popular script right now is Microsoft Activation Scripts (MAS) — it's open source and actively maintained.
Functionally? Nothing.
Legally and/or morally? That’s up to you.
Your device will behave exactly the same no matter which method you use.
Just pick whatever helps you sleep at night.
Microsoft Activation Scripts (MAS)
If you want to know more about your options, check out this video by Linus Tech Tips