It never was about emotional things like being scared.
It's about eliminating competition and especially preventing potential future competition,
it's about maximizing control and power to the most you can without losing otherwise
(due to e.g. law regulations lost consumer trust etc.). It's just a game of numbers
and future prospect.
Just the fact alone that Valve has Linux as a form of "escape hatch" if Microsoft locks things down more. With a bit of "future potential" (Valve Gaming console which is more then "just" the Steam Deck) is enough for Microsoft to take actions like that from a purely calculative perspective.
And Linux Desktop _has_ future prospect, maybe not in context of how currently most Linux desktops are but prospect anyway.
I mean Linux desktop has a lot of additional challenges:
- like _massive_ fragmentation through every layer of components and users, often with a lot of more emotional then technical opinions
- much smaller financial resources etc. (the companies which invest are either small (e.g. System76) or are not focused on desktop Linux (e.g. Canonical, Red Hat, Valve))
- a lot of money is flowing into server Linux hence all decisions tend to be focused on the server aspect thing things which are negative for desktop Linux and can not be configured away. (Through also a lot of "accidental" improvements and maintenance.)
but even with all this challenges Desktop Linux is quite usable, actually for some people _more_ usable then Windows. The main problem is normally not missing functionality or hardware support but fragmentation. Fragmentation making it a bad deal to support Linux as a software vendor (getting better through Valve, Flatpack and Snap), fragmentation wasting dev resources, fragmentation making system management/hardware support harder, etc. As well as there not currently being too much monetary reason to invest into 1st party desktop Linux support (Valve is a special case, System76 is small).
But non of the reasons which make people not use Desktop Linux are fundamental, and under the right conditions _one specific_ Linux Desktop could become highly successful. It's very unlikely but it's still possible, hence there is reason to make sure it's not possible.