Yes, that's the common excuse/reason. But, why MS can't negotiate the move with those 3rd parties? That would be a good PR for them as well.
And this is if Microsoft DID want to open source it, which if they were giving in to a demand from FSF, or trying to do it as part of a goodwill "Microsoft <3 Linux" initiative then you will quickly find that the costs far outweight the benefits.
People's time isn't free.
The other problem is open sourcing the Windows code would be also involve open sourcing its crazy huge build system and tooling — it’s not a simple makefile — which is probably another level of impractical.
They were able to get rid of a lot of Windows 1.0/Dos back-compat junk with the release of x64 (due to loss of native 16 bit support). I'm sure there's still some though.
My employer uses 32bit VDIs to run a few legacy applications.
It must be pretty expensive to port/test all of their patches/updates on something few use [0.70% per [0]). They already killed it on their server line (although it was silly on there with the low memory limits). Nvidia has already announced they're ending support[1].
[0] https://www.pcbenchmarks.net/os-marketshare.html
[1] https://www.extremetech.com/computing/267180-nvidia-ends-sup...
I noted in another comment that they have a similar problem with people wanting VB6 open sourced, because so many businesses rely on VB6 apps - some written internally or exclusively for their business.
Windows 10 (from what I remember) almost didn't support VB6, but in the end they included the runtime DLL to allow for the apps to work. I wonder if this is a part of the 32x thing? Seems a likely possibility...
VB6 and the companies relying on it might be an albatross around Microsoft's neck; for how much longer, I'm not sure.
I find it difficult to believe that Microsoft would keep Windows 10 x86 around if usage was really that low.
Backblaze found that about 4.5% of their customers use 32bit Windows in 2017[0].
There are probably lots of other reasons that MS won't open source an older version of their flagship product, but this "OMG licensed 3rd party code" excuse is overplayed (by lots of other companies, too) and needs to die.