UWP is not strictly tied to the Windows store (you can install UWP applications packaged in the right format(s) from the command line, for business deployments for instance), but it might as well be when it comes to consumers.

I can't really complain, though. If UWP would've broken through, the Steam Deck would've probably been a much more massive undertaking to get working right.

As long as developers can opt into the new system (which they can with the manifest approach), I don't think it matters whether you're doing UWP or traditional Windows applications.

Microsoft has added a mishmash of flags in the app manifest and transparently supports manifest-less applications, so developers don't have a need to ever bother including a manifest either.

It'd annoy a lot of people, but if Windows would show a "this app has been written for an older version of Windows and may be slower than modern applications" warning for old .exes (or maybe one of those popups they now like about which apps are slower than they could be), developers would have an incentive to add a manifest to their applications and Microsoft could enable a lot more of these optimisations for a lot more applications.