Yes, however that remains the same for Windows, in that they know (or at least, they surmise) that they can make more money with AI features than without, a hypothesis that remains yet to be tested, but it doesn't mean they don't know what they're doing.
I do still strongly suspect Microsoft's endgame is to get people off Windows in the consumer space, and that most of what's going on right now with 11 is froth as they add features they think will make them money in the near term even as it drives people off or be useful in the non-consumer space, not because they sincerely think this is something people will find a net gain in the consumer space.
So yes, I agree it's likely not primarily ignorance driving this.
I would assume because it's hideously expensive to maintain a full OS and support and compatibility guarantees with all the random horseshit consumer platforms throw at them, and they did the math and concluded they liked the profit margins for purely online and non-consumer targeted things, where they can more effectively constrain what is and isn't supported, better.
In particular, my guess is that they looked at their estimates for how much they could make off recurring revenue sources in desktop OSes, and their estimates for how the desktop market is changing with more younger users not using them or viewing them as legacy platforms, and decided they should pivot to primarily being a services provider, in much the same way they're aggressively trying to slap the Xbox branding on other things and getting out of the console market as fast as they can run.
Could be wrong, I don't work there, but usually my experience with companies that large making apparent missteps is that their goal isn't the one you think it is, and attempting to extract as much data as they can from desktop users really sounds like what you do when you're trying to squeeze the sponge before you throw it out.
It's true that the cloud is a big revenue driver for them, but I highly doubt they'd get rid of one of their flagship products, much less one used by billions of people as well as other corporations and governments.
I don't think they want to kill it entirely in the next 5 years, at least, but I do think they just want to stop supporting the non-enterprise users because that lets them significantly constrain what hardware and features they have to maintain, and all their big software offerings are very content being sold as cloud-based recurring revenue sources.
I would assume after 11 LTSC finally EOLs might be the earliest they'd be considering anything more drastic, but I wouldn't speculate whether it'd look like a good idea by then.
It may sound wild, and certainly possible time will prove me wrong, I'm not an oracle, but the ongoing failures in basic functions in Windows seems like they're removing significant investment in it as a reliable platform for general use going forward, and their recent introduction of things like the Xbox handheld running Windows makes me suspect their goal is to constrain where it's still used, and trim how much it costs to maintain that way.
