I wonder if the Commodore 128 had an Intel 8088 instead of a Zilog Z80 coprocessor if MS-DOS mode would have made it more popular?
If it didn't have a Z80 it would have had nothing else instead.
If they decided on MS-DOS compatibility instead, if it sold well or not would depend on how cheap it was to compete with the rest of the clone market. No matter what it would have been a "stopgap" machine since things were moving so fast back then.
A few other companies did make early IBM-PC clones which weren't 100% hardware compatible, and that didn't go well for them.
https://groups.google.com/g/comp.os.cpm/c/hj2M4TIRRKE