Earlier quoted context omitted.
My understanding is that drivers aren't part of the kernel in Windows like they are in Linux. And I believe an ARM build of some kind or another already exists out there for Windows
It does. Officially there is an ARM build of Windows that Microsoft licenses to OEMs, and there is (or maybe was?) Windows IoT Core which has a build for ARM. If I recall (grain of salt then) a while after the first M1 Mac came out one of Apple’s VPs had said something on the record about Apple having tried to get Microsoft to sell retail licenses of a Windows 10 for ARM build, because they didn’t want to deprecate B…
Microsoft does not sell retail licenses of Windows for ARM devices and what Apple proposed isn't the way Microsoft currently does business for ARM hardware.
Yes, Microsoft could change how they do business to accommodate, but so too could Apple.
If Microsoft turn around and ask Apple to license Windows and provide the OS as an option to buyers, or ask Apple to supply Macbook hardware so Microsoft could sell Macbooks with Windows on it, Apple likely would have said no too.