UWP on the PC is the Windows Runtime and it has barely changed; it’s the Windows Runtime merged with the mobile runtime and extended to support newer devices.
Microsoft aren’t stupid enough to enforce UWP on games on their own closed hardware platform. Their walled garden would literally kill their platform when it comes to games; developers like to work very close to the hardware when it comes to consoles.
No, they can’t, that’s the whole point of competition law. Microsoft are so heavily established as a dominant market force that they are not in a position to start preventing third parties from enjoying the freedom of the platform that they currently have - to do so would be an impairment of the free market. They are legally obligated in numerous territories to behave in a certain way - this is why their dodgier versions of the operating system are generally only available in places like Africa, where competition / anti-monopoly laws don’t apply. It’s also why they cannot bundle Windows Media Player with the operating system any more; it’s seen as detrimental to the health of the market when it comes to media consumption.
You can’t just ‘use linux’, because you can’t just go and buy a linux PC off the shelf in any retail or most online stores, it’s just not an option for the average consumer.