It's been in the process of happening, albeit very slowly, since 1996: https://reactos.org/

I've heard of ReactOS, and it's not what I meant—the 'pipe dream' was Microsoft itself open-sourcing Windows and all its components, from the NT kernel to every single tiny program in Windows, like the various MMC plug-ins, Aero shell, Explorer, Task Manager, etc.

It's highly unlikely, ergo 'pipe dream'.

The new terminal, and more importantly conhost [0] are open sourced, that's why I believe some day far in the future it will happen.

[0] https://github.com/microsoft/terminal