Your idea is somewhat possible, but it's never going to happen in reality. I can already run windows in a VM for the exact same result.
Running Windows in a VM would be less efficient than running a stripped down Linux stack inside of a container. Going the Linux+Wine route requires less proprietary code and would be free to license. Hardly an exact same result.
Valve are financially incentivized to get as many games working as possible, I don't think it makes sense for them to do nothing at all about this. They have a head start now due to the general crappiness of Windows on a handheld but Microsoft's mobile offerings could catch up and given that would have Call of Duty among a lot of other heavy hitters available while Deck wouldn't, that is a problem that Valve would need to solve in order to not get stomped.
Just because you know what the base is doing, doesn't mean you get to see what the proprietary kernel level drivers, loaded at runtime, are doing.
Really it's effectively as good as having windows and running an open source web browser, or an open source kernel driver. It doesn't change the fact that your computer is being fundamentally controlled by components you can't change, some/many of which are also proprietary.