All of that makes sense from a user perspective, but why take 30% of a wide base of consumers and businesses when you can take 100% from the most profitable ones?
They want to sell you an Office365 subscription for each user, whose computing needs are provided by a remote desktop served on Azure compute, which you access from a Surface device, where your business information is stored and accessed through databases on their servers and software they provide. They want your enterprise identity to be managed through their offering, and your warehouse automation microservices to run on their k8s platform.
Their consumer play is looking more and more like it's Xbox focused, and some personal software interoperability with their enterprise offering. The consumer OS layer is less important now they missed mobile - they get end consumers by selling the cloud [0] to the business who sell to them, not providing the shopfront to the end user.
The model they're moving towards is that the "desktop" is largely going to go. You want some software? Here's a dumb terminal and a burst of virtual CPU from the cloud to run it for the 45 minutes you need. "Installing" things (from an end user perspective) is going to seem old hat within many of our working lives.
That being said, am sure a shopfront will emerge at some point, but for cloud based software, not for installable onto an OS software. That only really comes after this whole transition is complete though.
[0] and "cloud" in this context not being commodity access, but the vertical software integration to go with it.