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Microsoft don't use MASM in any 64-bit modules as far as I know.

This sounds like folklore, Microsoft do not produce anything that they don't have a use for yet 64 bit MASM is as current as CL.EXE.

All speed critical algorithms (graphics/math) are all done by the compiler. This also apply to the CRT code like memcpy, strlen and so on.

Interesting theory but Microsoft do not post how their OS code is written but they do produce 64 bit MASM.

Reducing size in it self may increase speed like jump distance and code cache.

It also may not, apart from algorithm design choice, the main factor is the choice on mnemonics and the instruction count.

I have been hearing this folklore since the middle 1990s, MASM could not do all sorts of things according to TASM, NASM and a number of others. Then there was SPASM and the modified Watcom forks from WASM with their sales pitch but the bottom line is MASM has been with us since 1981 and is still produced by the same OS vendor that created it.