An example of Extend would be building features for WSL that only work in WSL, not Linux proper. So now people become dependent on the MS ecosystem, and lock-in begins; the lock-in is what enables the Extinguish phase.
That thing already exists, DirectX is available only under WSL: https://devblogs.microsoft.com/directx/wp-content/uploads/si...
Extinguish phase is not clear though. (at least for now)
At this point, 3d rendering is a bit of a crapshoot; Multi-platform vendors will likely have a pluggable rendering pipeline anyway (i.e. need to use DirectX for XBox, PS4/PS5 APIs, Metal for iOs, DirectX for Windows, maybe Vulkan if they developed on Linux or just want to make it easier to port later).
If I reach in my head, perhaps some form of 'DirectAI' API could limit competition in some markets or force vendor lock-in.
Otherwise, I think Microsoft is in a space where they seem to be pretty OK with; being the #2 in a lot of spaces is still profitable, with the benefit of less oversight regarding antitrust.
The other place I -might- forsee Microsoft doing 'lock-in' is around their developer tooling. By that I mean, they have a lot of cool tech that is a PITA to deploy at scale... unless you use Azure. SignalR scaleout would be a prime example that comes to mind.