A firmware update should not be seen as a hardware change as it's not a hardware change. MS really does suck.
I agree, but it seems to be happening. It's happened to a friend as well, slightly different circumstances though, he was on an OEM key and updating his BIOS deactivated his install, it was unrelated to the more current issue where an install activated off a W7 key won't re-activate the same install because the upgrade period has passed.
I'm not sure if Windows takes some kind of hash of the BIOS and includes it as part of the hardware ID or what, but it is happening, just not in 100% of cases.
Conversely I've updated the bios on my previous PC (an old X99) a bunch and never had it deactivate once!
It's a piece of nonsense you're possibly having to choose between security patches or retaining an install activated during the grace period, MS needs to sort that but I doubt they care.