I really don't think it is about cannibalizing sales for Apple. If they feel it is the right decision, they will. They have done this with other products of theirs in the past. No, I think for Apple its about how MacOS on a touch interface just doesn't feel right. When I have used Windows 10 with a touch screen, its not a great experience for me. The icons are small - like having to try and click the "X" button to close a window. The "X" icon is smaller than your finger input.
Apple wants to create the best touch experience and they do that with iOS and iPad OS. Its built for a touch screen in mind. Mac OS is built for input from a mouse or touchpad. From interviews that I've seen, Apple feels like this is a terrible compromise to try and make the iPad an all-in-one device for Mac OS. Microsoft took this approach and Apple feels like the experience is bad. The surface is not a great tablet nor is it a great computer because of the compromises it had to take.
An iPad is an awesome tablet experience and the Mac is great computing experience.
That could be as well. I echo your sentiment on Windows as a touch platform. I can't see macOS as it is being better.
The only way I could see macOS on the iPad as being viable is using a keyboard and mouse or trackpad to interact. And the one that makes the most sense is the Magic Keyboard for iPad that includes a trackpad and a keyboard, or else you can buy a Magic Mouse/Trackpad/Keyboard but then you'll be using bluetooth and having to recharge 2 or 3 separate devices. And I just don't think Apple would give up that touch screen for nothing and make it completely useless.
I do still think they do worry about making the iPad too powerful vs a MacBook. It already outsells Macs regularly. Granted, they are cheaper as a whole product range, but even the iPad Pros sell better. That said, the Mac got a boost during the work from home era of 2020 and it's spread into 2021. It was good to see. And perhaps I just hate to see something like that happen to the Mac, even if it won't it bothers me. As much as I think iPad Pros can be desktop replacements - the Mac (specifically an orange iMac) was my first Apple device years ago and I'm sentimental to a fault.