I have talked to a few building officials around the state. The building official where I live has changed his mind twice already so I was looking for advice elsewhere and reached out to a few others in neighboring townships.
In the end, it's gonna be his call, so it's his opinion that matters...
Standard code language from the International Residential Code (which the Michigan code is based on, the Michigan version will be similar but may be slightly different).
"Accessory structure" is a defined term in chapter 2, it means a structure that is accessory to a "dwelling". A "dwelling" is any unit that contains one or two "dwelling units". A "dwelling unit" is a single unit providing independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation.
If you have both plumbing and a microwave or other cooking appliance, you have a "dwelling", not an accessory structure, and therefore the exemption for being under 200 sq. ft. does not apply. It doesn't matter how small it is, it requires a permit.
If you are missing any one element for sleeping, or cooking, or sanitation, you have an accessory structure that the <200 sq. ft. exception applies to. If that is the case, local rules may still apply, as zoning and local amendments I am not privy to may have issues with structures that have the potential to become dwelling units.
Be aware that even if a project does not require a permit, it is still required to meet code, which means there should be smoke alarms installed to protect the sleepers.