You tell the compiler which minimum instruction set you want as some fallbacks would be so incredibly slow its not worth using.
I believe a lot of modern software requires AVX instructions for example, any CPU that does not support them would be way too slow to run that code so you don't include support for them.
There's also things like virtualisation where a CPU not supporting it wont allow low-level access to be passed into the virtual machine.
Intel have added quite a few new instructions to their CPUs which I haven't seen talked about, they just show up in the flags, but I'm sure Microsoft know what they're for and will use them if a comparable instruction is also on AMD.
Continuing to have fallbacks for missing instructions complicates the code dramatically, Microsoft are trying to root out as much legacy code as possible in 11 as Windows is extremely bloated.
The only thing I can think of as to WHY they limited the CPUs so much, is so they can make these optimisations and slowly test if the older CPUs still run sufficiently without them. However this should have been done BEFORE launching 11, not in such an incredibly public and disruptive way.