Visual tracking. the windowsMR solutions are inside out tracking, meaning no external sensors. The lights allow for positional tracking by the headset.
They are not better than the oculus controllers, but theyre a good 90% solution. Theyre very precise, but you cant put them down at your sides or behind you for more than a couple of seconds without some precision loss since theyre visually tracked by the headset.
The whole system also only costs 150-200 bucks vs 400ish.
The display in the headset is better than the Rift, and the ecosystem is too. Mixed reality in windows is really cleanly designed.