I think they are, in their own way - they’re making sure Windows can work on the new Arm chips with an improved translation layer they continue to improve (important if new handhelds etc use Arm rather than x86), they’re continuing to improve the interface for gaming handhelds and they continue to improve DirectX12 with Nvidia and AMD and look at their own upscalers, auto improvements and AI tech.
They even a few years back put the Xbox app into the core of Windows meaning it’s there on corporate machines and has to be disabled, much to the annoyance of firms - but it also means Game Pass can work on Pro versions of Windows for example, which wasn’t always the case.
They can’t do much more than they are - they have to play nice (both in terms of letting others put anything on Windows, such as drivers for competing hardware like the DualSense, and porting Office etc to Mac) because Windows is so dominant it counts as a monopoly still.
I’ve little doubt though if we started to see Windows and Office lose their monopolies, that “sharing, caring” Microsoft would quickly revert to “destroy all competitors then pay the fines later” Microsoft - they know they’re core to their profits and to the success of Azure…