* .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...
edit: To clarify, all MSIX packaged apps run in an app container called Helium, but it's a very soft one that isn't meant to sandbox anything. It just redirects file IO to a special directory so installs/uninstalls are clean. You can make app containers stricter. The Chrome sandbox does that, UWP sandboxed apps do that, and now they're adding support for more strictly sandboxing ordinary Win32 apps which would otherwise break when they tried to open a file in the user's home directory.