Why did Windows 95 setup use three operating systems?

I always thought Windows (until 7) looked so lacking in polish around the edges compared to even the earliest versions of Macintosh system software -- especially during install, boot, crash, and shutdown. During boot, for example, even modern Windows boxes [correction: pre-EFI only] show a BIOS screen followed by a brief blinking cursor before the Windows graphics mode takes over. It was much worse in earlier versions.

The Macintosh screen never dropped you into a text-mode console, no matter what. Everything on the screen was graphics-mode, always -- and there weren't glaring design changes between system versions like in Windows (except at the Mac OS X introduction, which was entirely new).

Installing Macintosh system software onto a HDD was literally as easy as copying the System Folder. System installer programs did exist, but in principle all that was happening was optionally formatting the target drive and then copying System Folder contents. So simple. Of course there were problems and shortcomings, but the uncompromising design esthetic is noteworthy and admirable.

>During boot, for example, even modern Windows boxes show a BIOS screen followed by a brief blinking cursor before the Windows graphics mode takes over.

This hasn't really been the case for more than 10 years now. EFI based systems will boot without changing display modes. Some hobby custom PCs might have compatibility modes enabled, but any laptop or prebult system is going to go from logo to login without flickering.

It also has nothing to do with Windows. Apple controls both the hardware and the OS, Microsoft controls only the OS. If the OEM decides to have the system boot up in text mode, there's nothing Microsoft can do.

Microsoft has (had?) quite some power over OEMs and could set requirements on the system. A system not compatible to windows won't see much sales.

However Microsoft values compatibility, which probably is in conflict with requiring more.