@BFG10K
I wrote a much longer response than this and saved it as a draft but it's been lost, so hopefully here's a briefer version!
I don't think backwards (at least win32) compatibility is Windows's main attraction to most of its customers, it's familiarity, which is also something that MS keeps messing with like deckchairs on the Titanic.
I think MS's main problem is that they have an opinion that Windows doesn't draw the kind of revenue they would like, ie. subscription-based. Subscriptions are nice, regular payments that look great on balance sheets and give an easier-to-digest impression of a product's popularity, and generally constitute far worse value for money for the end users. Subscriptions and operating systems don't go well together both legally speaking and in terms of popularity which leaves MS forever in a quandary with regard to Windows.
Therefore IMO MS sees Windows as a delivery vehicle for subscriptions/services rather than a vehicle for productivity. It's why MS is always increasing its advertising techniques in Windows including their most recent plan to put ads in the Start menu.
With Windows's complicated/fragile status in terms of revenue, it leaves Windows with a complete lack of long-term leadership and vision. There was no good reason to supersede Windows 10 and I think the only reason why MS released Windows 11 was to appease OEMs who likely believed that a new version of Windows would drive sales. Incrementing the release number by one is hardly likely to improve matters, and isn't going to change the fact that Windows 11 is not popular by Windows release standards and MS doesn't know what to do about that either.
Overall I think MS needs a solid kick up where the sun doesn't shine, perhaps in the form of a credible threat to take its home users away from them. Maybe then they'll also stop pedalling several products with the same name (which I suspect is part of an intentional attempt to make basic-end computing more complicated and encourage a culture of "if in doubt, subscribe to Microsoft Everything").