Yeah I think the clown is supposed to represent Windows Executives changing their tone about Linux over time, but I'm not certain. If anything, accepting that you were wrong is a sign of strength in my opinion.

"Micro$oft bad"

Who cares as long as it says "Microsoft bad"

which, confusingly enough, is a linux subsystem under windows. The name sounds like the opposite.

They’d probably just buy canonical in this scenario.

How would that affect any of us? Linus Torvalds would still be the lead kernel maintainer, all the other FOSS distros would still exist, and all the people that currently use Linux (out of conviction, out of idealism, out of the FOSS/GNU philosophy) would stick with them, meaning de facto no change whatsoever.

A few things come to mind here.

1. MS tried to ship a renegade JDK with proprietary features, back in the 90's. That didn't go very well for them, as they drew the ire of Sun Microsystems which was a decently sized player at the time. It was a clear licensing issue, and they lost the case. Point being: they're historically not great at this kind of thing.
2. The GPL is designed to thwart this scenario, specifically for things like paid software (e.g. Windows). MS would have to move to a "free Windows software, paid service" model before any of this could happen. But the service must be optional, and they'd have to provide the source to anyone that wants it. That said, they're on track to make Windows free (as in beer), so who knows?
3. Nvidia gets to ship binary Linux drivers, so closed-source binary packages for MS proprietary components on top of Linux might be possible. But again, I don't think they get to charge for that.
4. WRT to drivers/packages, RedHat famously charges for access to their package repository, making automated patching and upgrading a nightmare if you go without. This is one hell of a GPL loophole and worthy of far more corporate exploitation. I can easily see MS following this path.
5. "The net treats censorship as a defect and routes around it." - John Gilmore - (Many) People will just fork away or happily sit somewhere else in the GNU family tree, far from anything MS builds. If the need arises, compatibility layers like WINE will show up eventually.

thats EEE and we are all afraid of that

It's called Linspire, what you've described happened 20 years ago. It was not the cataclysmic event you described it as. TBH I'm not that concerned about a company who charges $400+ for an OS that still shows advertisements and loses support after 5 years when I could go out and get an OS with no ads or bloat for free that will never lose support.

No one considers Linux to be communism
It was MS propaganda to tarnish the reputation of linux

Can't imagine why people would call freely distributing a means of production some commie thing

That's just good patriotism, ensuring everyone, no matter their means, has access to a vital resource for modern life

EEE only works if you can corner the market for the technology. I almost guarantee you nobody is dropping Linux in favor of WSL.

Not really. MS and others have grown dependent on it, and going forward with eee would be shooting their own web service foot.