Except that it was demonstrated that IE could be removed from Windows 98. So Microsoft then claimed that Windows ran slower without IE. A judge (because this whole saga went to court) argued that Microsofts video evidence proving that point was falsified and so Microsoft later also dropped their slowness claim too.

No, it wasn't. There was w98lite and such where you could replace WIndows 98's (i)explore.exe/shell32.dll with a Windows 95 one and yet the rest of the software just ran like nothing, while being able to run IE in a standalone way.