I think the whole point of Steam OS is to cut down reliance on Microsoft. If Microsoft really wanted to the could cut support to Steam all together.

The product is Steam. They made a reference device but Valve would much rather provide a Steam-first software to third-party hardware vendors than be a serious hardware competitor. The important part for Valve is not allowing Microsoft to become the new go-to PC games storefront like they're trying to do with Game Pass.

Valve makes the Deck, so, most Deck users use Linux.

Maybe more people would use Linux, and they'd take more Windows users and marketshare from Microsoft to make Linux support more of a priority if it was more available.

Gabe doesn't care about the Legion Go 2, this man has a 30 year old vendetta against Microsoft.

Their primary business is selling games, not steamdecks

They aren't that interested in selling Steam Decks, it was the means to an end right from the start

well, that and the fact that they're likely selling the steam deck at a loss. if potential steam deck buyers are convinced towards a competitor instead, that's still more money for them

Bazzite exists and it's literally a drop in replacement. Maybe chimera also? I've never tried it though.

It's not really a competitor, Steam's business is selling games, not consoles.

The steam deck is just one way for them to increase sales on steam.