OS is such a broad term, especially when applied to Windows which is closer to a Linux distro. Is it the kernel? Windows is fine there as by all accounts the issues are higher up. They’ve had some problems with their update process which is surprising - historically that team would have been populated by the better engineers. most of the other problems have been in the shell and UI where good engineering discipline is not to be quite as expected.
Yes, but the OS fundamentals are for Azure first, Windows last.
Azure makes money, 50% of Windows computers are basically free and need to get you to sign up for a subscription some how. The other 50% are Windows Pro/Enterprise, but MS assumes they'll get that money forever so doesn't put any resources into that. In 10 years the kids switching to Linux on desktop today will be in charge of the business deals and switch corporations to linux because they're not scared of it like the current business IT leaders
They are not free. OEM costs money. Hence with every laptop with Windows preinstalled, you pay a fraction to Microsoft, even if you immediately uninstall and add Linux.
Maybe not, there are plenty of hard things to do at Microsoft scale, hypervisors (which I guess could count as "OS" but maybe not "Windows" in the consumer-product line sense), compilers, languages, hardware since Microsoft is doing that too, browsers (although the hard part is chrome-based, probably they contribute to it), databases, distributed systems for cloud products, etc. Plenty of hard things to do.