> Apple’s Rosetta 2 and Valve’s Proton have shown that these kind of emulations can be extremely effective.
Rosetta and Rosetta 2 are CPU emulation with the same underlying OS – so quite a different problem from what WINE/Proton/etc address. And something Microsoft actually already has anyway – their implementation is less impressive than Apple's in terms of performance, although it can do some interesting things which Apple's can't – in particular, mix emulated x86-64 and native ARM code in a single binary image and process (Arm64EC) – Apple fat binaries are two completely separate binaries concatenated together into a single file, only one of which is actually loaded; Windows Arm64EC binaries mix x86-64 and Aarch64 code in a single binary image, so one function can be native and the other emulated. A program can be native Aarch64, but still be able to load legacy x86-64 plugin DLLs, with some performance penalty incurred for the later [0] – something Rosetta or Rosetta 2 can't do, although Classic MacOS had similar support for mixing emulated 68k and native PPC code in a single process.
Valve's Proton is just a fork of Wine, and it works great for a carefully curated subset of games. However, games are a relatively narrow category of applications, there are lots of things other categories of applications will do which games never will.
> 3. Build a binary parser like Rosetta that detects use of any incompatible Windows APIs
Sometimes, the problem is not with the APIs themselves, but particular patterns of using them. A straightforward emulation of a Win32 API under Linux will behave the same for the vast majority of cases, but in rare edge cases will behave differently. Inspecting a binary to detect what APIs it uses won't tell you whether it is one of the minority of APIs which depends on one of those edge cases. Sometimes the developers themselves won't even know, because it is not unheard of for developers to do weird stupid things by accident rather than intention, yet it just so happens they work, and they don't even realise they've done something weird and stupid.
The biggest problem with your proposal, is will the huge dollar investment it would require of Microsoft, actually be worth it for them? Even if (maybe) saves money in the long run, it will cost a lot more in the short-to-medium term. And the fact is, Windows licensing revenue is still massive enough to more than pay for what Microsoft is spending on Windows development, so there is no financial pressure for them to save money in the long-run – and migrating Windows to Linux would make it easier for their customers to migrate away from Windows, hence risking that revenue stream. Why take such a big risk with one of their cash cows for such an unclear benefit for them?
[0] https://devblogs.microsoft.com/windows-music-dev/load-x64-pl...