However, these services revenues (App Store tax, iCloud storage, even the deal with Google) are still anchored to users' loyalty to the platform. So Apple needs users to (1) stay on the platform and (2) buy new devices. Making user experience painful everywhere except for on the newest devices works against (1) and for (2).

That said, Microsoft's trade offs re quality of their software are rather different and their solution is even weirder: high-quality user-facing software is not in competition with their b2b sales, so ok, no reason to spend too many resources on it, but absolutely no evident reason to make it noticeably worse either.

As a result, Microsoft's approach of regressive evolution probably lets Apple get away with almost not caring or even going the path of slower regressive evolution.

Not really anymore, their silicon is impressive but most users I would guess don't use it in any meaningful sense. If hardware is your main goal as a customer, you're building a machine with better hardware.