I think it's very likely they will cancel Surface sooner rather than later, and not-so-gracefully exit the consumer PC hardware business altogether, focusing entirely on Xbox, Cloud, Windows, and first-party software. There's a big difference between money to burn, and simply burning money.
Sure, MS may keep Surface around as a boutique item similar to what Google's done with the Pixelbook (e.g., select markets, random offerings, technology demo, etc.) but overall news like this would certainly push any team, no matter how insular they may feel, to sharpen their CVs for that inevitable staffing purge to come to an underperforming product line (e.g., Windows Phone, HaloLens, Band, etc.).