I would argue that that's not true. Many of the most popular LPs and LPers are popular because they're, among other things, hilarious. Using some material to produce hilarious content (content that is meant to be laughed at/with) is a form of parody, even if you don't directly make fun of the content you're using.
It would change in different situations, it's just an example.
And the article makes no distinction between parodies and let's play videos. This leads me to believe all is equally forbidden.
Here's what I found on Microsoft's website.
Spoiler Here are the magic words from our lawyers: on the condition that you follow the rules below ("Rules"), Microsoft grants you a personal, non-exclusive, non-transferable license to use and display Game Content and to create derivative works based upon Game Content, strictly for your noncommercial and personal use. This license is limited by the conditions and restrictions below, so please read them. We can revoke this limited-use license at any time and for any reason without liability to you.
If you share your Items with others, then you must include the following notice about the Game Content. You can put it in a README file, or on the web page from where it's downloaded, or anywhere else that makes sense so long as anyone who sees your Item will easily find this notice.
For videos that try to add to the fiction or canon of the franchise universe, please put it at the beginning of your video for at least five seconds. For all other videos, please put it at the end of your video for at least five seconds. Burying the notice, for example, deep in a web page in small print that is hard to find, does not comply.
[Name of the Microsoft Game] ? Microsoft Corporation. [The title of your Item] was created under Microsoft's "Game Content Usage Rules" using assets from [Name of the Microsoft Game]. It is not endorsed by Microsoft and does not reflect the views or opinions of Microsoft or anyone officially involved in producing or managing [Name of the Microsoft Game]. As such, it does not contribute to the official narrative of the fictional universe, if applicable.
Wherever you put the notice, you also need to include a link to these Game Content Usage Rules, so people can find them.
I think that's it, not 100% sure though. Under that description parodies AND let's play videos would be perfectly okay as long as you aren't profiting from it.