I have a feeling that Windows Nano Server w/ Powershell + .NET Core might make this text relevant again soon. Having a consistent OS that scales from containers to servers and desktop is a big benefit in corporate. Now if it matched performance of an Alpine, played well with WSL, and Microsoft would manage to push the major open source stuff for compatibility. I'd give Linux 5 years. But only time will tell..
I really, really hope that you're wrong. I optimistically hope a not-too-future (within 10y?) major version update of Windows is in reality a *nix distribution. As long as they can keep runtime compatibility with older versions of Windows software, I think it'd be a big win for Microsoft for various reasons. The only real challenge would be to get driver vendors in line.
People have been down the Windows CE and Windows RT rabbit holes before. Windows Nano does nothing there.
In the server space, it's a possibility, but why? Other than running MS specific software, what is the benefit?
On the other hand, even with WSL2, Linux is not going to have it's mythologized "year of the desktop", unless you count Chromebooks. So Windows will maintain its niche there.