The activation procedure I recount is based on my own experiences activating windows on changed hardware over the years, noting improvements and changes as they occur. Others may have different recent experiences which would be helpful to hear.
I specifically asked a MS Activation agent if the robocall question "How many machines is this copy of Windows 7 installed upon?" is implied authorization to overwrite the hardware signature for that Key in their Servers, and the reply was Yes, explaining that the hardware signature never washes out until it is overwritten.
How often an activated install communicates with the servers to see if it is still activated with that hardware signature is one question I still have.