When a consumer purchases a Denuvo-protected game, they are not purchasing a product in perpetuity, but a limited-use license. The 5-machine cap introduces a form of planned obsolescence. If the publisher ceases operations, or if the Denuvo authentication servers go offline permanently, the activation limit becomes a brick wall. Even if the user has remaining activations, server shutdowns render the game unplayable unless the DRM is removed by the publisher.
When you launch a Denuvo-protected game, it checks your hardware configuration (CPU, motherboard, GPU, RAM) and OS against its servers to activate that specific machine.