Tl;dr wince team forked visual studio 6 (I think it was 6, I don't recall it was long ago) to make a custom UI and a tool called platform builder.

This was needed because VS didn't have the extensibility needed to do this without source access.

The fork got more and more out of date and it is hard to justify spending resources on an internal tool like that. WinCE was incredible but what was shipped to customers was a tiny sliver of what the OS could really do.

WinCE was also source available, which let it sneak into some really cool places, but the license didn't allow a community to be built up around it. MIT licensed WinCE would have easily gone toe to toe with embedded Linux.