How many people pay for Microsoft Office instead of just using Google Docs/Sheets/...? LibreOffice doesn't replace Office for the same reason why Sheets doesn't replace Excel despite being free. Huge difference in functionality if you're more than a casual user
Same applies to most free alternatives to industry standard software. FreeCAD isn't a replacement for Solidworks, GIMP isn't a replacement for photoshop, etc
From reviews of Windows-based gaming handhelds (ROG Ally, etc.), the cost of a Windows license is likely secondary compared to just how badly the stock Windows UI and power management (and incessant forced updates) suit the form factor, and Microsoft don’t look like they can be bothered to accomodate this comparatively small market (at least judging by their public behaviour so far).
That’s not necessarily to say that this was Valve’s original motivation. I think it’s just as likely they were setting up a fallback position for when Microsoft tried to push them out of game distribution using their Xbox platform. But right now it wouldn’t make sense for Valve to switch back even if that problem disappeared overnight.
That's surprisingly true even when the FOSS alternative is a perfectly suitable drop in replacement for a popular proprietary program. How many people pay for Microsoft Office instead of just using LibreOffice? When FOSS became more popular than the proprietary competition, it was only because the FOSS product was 10x better (think Firefox and Chrome vs Internet Explorer or VLC vs Windows Media Player and Quicktime) not because users actually chose FOSS.
Another example that proves this is how the single biggest increase in Linux desktop market share was likely due to a gaming handheld called the Steam Deck that is actually a Linux laptop. Linux allows Valve to sell gaming hardware without paying license fees to Microsoft or creating their own operating system.
The reality of FOSS is a far cry from the ideals of Stallman, ESR, et.al. that were the original rationale behind FOSS licenses.