tl;dr: The reason Live Traffic today is missing a lot of GA traffic, leaving smaller airports deserted, is that much GA traffic does not have ADS-B out or Mode S and therefore is not captured in the database source for Live Traffic. But as that gradually changes privacy reasons mean much GA traffic will still not be in the database. For that reason, Microsoft need to continue to focus on Offline AI traffic since we need that for GA.
(EDITED to tweak language that could be construed as political)
To further emphasize why Live traffic will never work for light general aviation traffic, consider this:
skyBeacon Wingtip Mounted ADS-B OUT - uAvionix
Just because you are ADS-B equipped, doesn’t mean you want to be tracked. With skyBeacon’s Anonymous Mode, your aircraft identification remains hidden from the ADS-B OUT signal while squawking 1200. Anonymous Mode keeps the skies safe while protecting your privacy.
This is just an example; other systems have similar functionality.
Another example applicable to the 1090ES flavor of ADS-B used by larger GA traffic is FAA’s PIA program:
ADS-B Privacy (faa.gov)
So even if the aircraft has ADS-B (many light GA planes still don’t in large parts of the world), even if there is a PiAware ground tracking station in range (not always the case in parts of the world especially at low altitude), even if the traffic is in the publicly available database MSFS pulls live traffic from, there is insufficient data to generate GA traffic from since it is hidden for quite obvious privacy reasons.
This is not a “bug” that Microsoft or Asobo can fix, it is a fundamental flaw with the Live traffic concept as it relates to GA traffic.
The workaround of randomly assigning aircraft types and callsigns to “blocked” and “anonymous” traffic seems of dubious value since it would not correspond to reality anyway.
Whether one agrees with the privacy concerns or not is not relevant in this context. The fact that live traffic data is filtered is enough to make Live Traffic useless for GA in the sim.
Offline AI traffic needs to remain the primary way to generate traffic at smaller airports, and Microsoft need to continue to focus (or return their focus) on making sure Offline AI traffic works well.