* .appx became .msix; the latter also works for Win32 apps
* UWP XAML/GUI evolved into WinUI, v3 of which doesn't target UWP
* Win32 app isolation—this news—grew out of AppContainers, which were used by UWP apps
That said, what's new here? You could package (.msix) Win32 apps with partial trust, IIRC. Does this remove the need for packaging?
See:
https://learn.microsoft.com/en-us/windows/win32/secauthz/app...
https://learn.microsoft.com/en-us/windows/win32/api/userenv/...
https://scorpiosoftware.net/2019/01/15/fun-with-appcontainer...