Win32 is a collection of windows APIs that allows applications to freely take use of windows. The problem being that 99% of current windows applications use win32 APIs, so all those programs would just be dead unless the alternative is api compatible. So in order to kill win32 Microsoft would have to release an api compatible alternative.

So what would happen if they did that? That is kill win32 and add an api compatible alternative? Best case scenario: nothing changes. Worse case scenario: every single standalone exe would be dead

So why kill win32? Power; by lets say locking the new api behind the windows store, they basically fully lock all applications to ever be redistributed to said windows store, killing steam, itch, epic games, and every single exe in existence. The only way applications would exist is by approval of Microsoft.

Now obviously this will never happen.

The entire premise of win32 shutting down is made up by people not understanding what they are talking about. However as a corporation, valve rather spends money on an alternative to be able to tell Microsoft, that they are able to significantly influence window’s desktop marketshare, than to let Microsoft do whatever they want, even if it is mostly just smaller things.

Correct, but so is linux itself as seen here, likewise, Microsoft also helps the development of the linux kernel as seen on this Linux Foundation webpage. Sometimes ad services sponsor non ad related projects.

In the case of firefox however, they are funded by google to have it be the default search engine, and not because Firefox itself sells ad spaces. So I dont quite get the point you are making