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I only wonder if this means less games on the steam deck. They might publish to steam, but make it as hard as possible to run in proton/wine.
Lately Microsoft has been friendly with Linux. They even released a guide in their website on how to install Linux alongside Windows. If anyone is guilty of actively trying to fight against Linux is Epic. For now, at least.
Until Microsoft opensources Windows, I won't trust them. Maybe not even then. The most dangerous thing they could do is become a linux distro, actually. Make a bunch of proprietary linux kernel modules required to run "Winux"-only applications and any distro unwilling to have proprietary kernel blobs will be killed.
Microsoft is known for Embrace Extend Extinguish. Their greatest feat would be killing linux.
They were known for that a long time ago.
They are pushing Linux hugely and one of its largest contributors.
Before the cloud you were spot on but they've realised windows can't compete in that area and actually costs them more when relating to their cloud services.
.Net is now open source and cross platform for exactly this reason.
WSL was created for exactly this reason as well and is awesome.
They won't create their own distro because, let's be honest, Linux isn't a competitor to windows as a desktop OS.