Why would Microsoft not work with leaders of a multi-billion dollar industry they benefit from to develop anti-cheats that work with whatever limitations they put on kernel access? Also isn't stricter kernel access in part being done for anti-cheat and related measures?
> Encouraging users to use the app store, or more accurately: discouraging users to install from binary
Why would this threaten Steam? Unless you're suggesting they can't just distribute Steam through this app store?
> They threaten Valve's business model, and Valve is responding with proton & SteamOS
You didn't even mention Game Pass or their store, which are actually more of a threat!