I know this will never happen, but I wish that they would go even a step further than that:
I wish they would admit that, for better or worse, Linux is the desktop to corral around. A proprietary OS for BYO hardware is very simply a Bad Idea, both in terms of developers (because you're at the mercy of the OS developer's documentation only) and in terms of users (because software will always theoretically be more stable on an OS that a developer can crack open).
So, rather than creating a Windows Developer Edition and charging for it, I would love to see them sunset Windows into a legacy/Enterprise-only OS that they charge a hefty fee for. And then I'd love to see them build a Linux distro that deeply interops with their services (i.e. their real money-makers) that they release for free.
This new "Windows" would be the new OS that comes pre-installed on laptops by HP, Dell, Lenovo, etc. It could look essentially the same -- perhaps their desktop environment could be called Glass (get it?) -- and it could still run win32 apps via Wine (which they would be a massive contributor to in this fantasy world of mine). A headless version could of course be available for servers running Azure. Etc etc etc.
They could charge for support (i.e. the FOSS playbook that's been pushed the 70s). They could of course continue to create proprietary apps and modules that they charge for, I don't care -- for example, a CoreAudio/CoreMIDI competitor that only audio professionals would really need. I'm not naive enough to think that proprietary/non-free software will ever go away, but the OS is simply not the place for that. Platforms of all kinds benefit from being FOSS.
I know that there's a great kernel down there, but Windows is just a mess. Just kill the damn thing. Let it die. I ran Windows 11 since it was released and recently switched back to 10 because 11 is just so unbearably bad, and I still only use Windows at all as little as possible, only when I have to for certain work.
None of this will ever happen of course, but a man can dream.