This is a very smart strategic move on behalf of Microsoft that I would have never guessed (not because it doesn't make sense but simply out of corporate pride, considering they are the authors of the "Linux Facts" memorandum...).

I think it's smart because this will capture all those Linux people who aren't super comfortable administrating their own distro and even for those that are it's now giving them another option if they ever need to run things both in Windows and Linux at the same time or just run into some Linux issues and don't want to spend the time on them they can switch to Windows 10 WSL.

At this point the only thing that I still think it doesn't make much sense is Microsoft running/developing their own kernel. It's entirely possible for them to start running Linux and run all the WIN32 support, drivers, DirectX, etc as a separate sandbox (similar to the type of sandbox WSL runs). The performance overhead from doing that should be negligible on modern hardware.

EDIT: note that I only mean switching to Linux kernel for their desktop OS, there are plenty of usecases of Microsoft kernels where every bit of performance matters but I suspect those will continue to use their own kernel as part of Windows Server releases.