As a Notepad developer, I might agree with you that Unix line ending support is a new feature.
As a user, I double-click a text file and it opens in Notepad. It opens fine in all of my other editors, but is garbled in Notepad. That feels like a bug.
I don't try to open .xlsx files in Notepad, so it isn't very relevant to me as a user that Notepad won't open them. If I did open one accidentally, I'd think "D'oh! That's not a text file!"
But this is just terminology. Files that Notepad couldn't open usefully before will now work. That's a good thing, whatever we call it.
The standard line ending format in the '60s, which was the height of the mainframe era, would probably have been the newline character in IBM's EBCIDC encoding, which differs from the value used for ASCII (https://en.wikipedia.org/wiki/Newline). Unix didn't really start taking off until around the early '80s IIRC.
Windows properly supported the newline format for its platform of lineage (CP/M + DOS) which also didn't start taking off until the early '80s. Not sure that Unix has any real claim to precedence here.
Probably the same way it still works on today's Unix systems: it converts NL to CR+NL on output. See the manpage for the stty command:
Output settings:
[-]onlcr
translate newline to carriage return-newline