I can be counted as one of the skeptics of MS's open-source efforts. It just seems to me that MS's history and recent investment in open-source puts us in a quantum state between two possibilities: 1. MS has changed their ways, and has become an altruist organization which just wants to give developers things of value for free so they might hopefully choose Azure when they decide what cloud provider to run on. 2. MS…
Try removing the word "proprietary" from that strategy, and see if it still fits the evidence you see. Or replace it with "paid".
Look at their earnings reports (https://www.microsoft.com/en-us/investor/earnings/FY-2020-Q4...). Licensing proprietary software is a small and shrinking piece of the pie, they don't even segment that way anymore in fiscal reports. They are (successfully) pivoting to become the Enterprise cloud service provider, and tightly integrated tools are an important part of that picture. Licenses simply aren't. So it's not "commercial office365", it's "commercial office365 and cloud", because o365 has tightly integrated Azure services and the revenue is tracked together. Which parts are OSS licensed is irrelevant, because that's not a primary revenue driver anymore.
A good example is the fastest growing service on Azure, AKS. 100% open source, even the implementation down to bare metal. They don't care about keeping it proprietary, because they make the same money with it either way.