I don't get it, what's the benefit of this? Why would your average joe want to use a cloud instance instead of running Windows locally? How does Microsoft benefit from this?
Microsoft gets to sell the sizzle, not the steak. They also have all your data since the OS is running on their computer, not yours. I guess this will make Windows a web app, working like NextCloud only on their machines.
If I don't misunderstand things, and we are talking streaming everything to a thin client, then this:
Cheap Chromebook-like Laptops, but can run Video Games, Video Encodings, Finite Element Analyses, Computational Fluid Dynamics etc no problem. “Your” PC can be accessible from your phone in a Pinch.
You open a weird Link and got a Virus? No problem, just roll back your “PC”
Your home floods/burns down? All the images from your children are still safe.
Never being bothered by needing a hardware upgrade.
Microsoft doesn't make the bulk of their money from average joes. They make it from companies using their products. But they're not making as much money from companies using really old hardware and versions of windows. Plus one of the biggest IT gripes is getting users to update their OS. This could mitigate much of those problems