One aspect is the technology, another aspect are the values driving that technology, another aspect is the legal aspect.
You are mixing them all and that's how the debate gets stuck into some neckbeard-limbo that nobody cares about.
Society made a lot of progress when religion and state got decoupled from each other. There are some things that should be handled separately.
What I have to say about this is:
Technology-wise, GNU/Linux software is separate from that of Windows at the binary level as well as dependencies. For them to extend such software means that they would need to build on that. That would extend the GNU/Linux ecosystem.
Legally-wise, open source software is protected by open source licensing that requires derived software to also be licensed as open source. It is challenging to achieve the "extend" part of the "embrace/extend/extinguish" loop if open source licenses are in place.
In terms of values, they're a for-profit corporation trying to reach out to developers. Same as every other company.
They have open sourced .NET, they've released some of their actually important software on Linux (SQL Server), they have embraced the Linux platform on their cloud environments... everything possible to appeal to developers. It doesn't appeal to me, though.