"OS/2 runs Windows applications better than Windows"....
With Wine, all of these functions can be mapped to their modern counterpart. Tray icons and fullscreen behavior can be updated to work as they should in x11, Quartz and Wayland. Breakage can be worked around in the same way Microsoft does with registries, but by the community. The end result is good enough that entire portions of Microsoft's customer base could just move over to Wine without knowing what happened.
Honestly, the best thing Microsoft could do right now is turn DirectX into a useless Metal-style API, and send the game devs running back to Vulkan. Would certainly make porting to multiple consoles easier.
At least for myself and two friends I just asked, none of us have ever used the trackpads aside from on the desktop and rapid-fire typing. On the desktop you can make do with joystick mouse relatively well, and typing with sticks or perhaps gyro is a bit slower but works fine. None of us has ever used the touchscreen.
For the Deck 2 they should honestly strip out the touchpads and touchscreen.
By taking out the touchpads they claw back real estate that can be used for battery or slimming down. No touchscreen means a little bit more money can be diverted to screen quality, and the screen itself is more likely to have smaller bezels.
I know stating this will ruffle some enthusiast feathers and probably send me into the deep grey, but I honestly think the trade-off would be worth it.
The touchscreen can go though.
I want real estate for a bigger D-pad. I find the Steam Deck's D-pad less comfortable than even the Joy-Con's.
The touchscreen is useful at the very least for the virtual keyboard.
Games like minecraft (java, not bedrock) make no concession for controllers but are flawless experiences due to the track pads giving precise, accurate mouse controls for the crafting interface. They can also be configured as flexible rotary menus or button grids directly in Steam.
They're great for emulators too, which have a lot of complex controls for things like save states. I've played a bunch of PS1 games through and found having all the controls for the emulator I would ever need in one sub-menu on the left trackpad.
They're IMO the real selling feature of the steam deck. The rest is just a computer to run the trackpads.
None of the Steam Deck competitors have trackpads either which make games not designed with controllers in mind so much more playable without hooking up a KB/M. I think it would be kind of a wash with Windows and no trackpads, yes you can play anti-cheat but strategy and other games are off the table or super clunky.