It is not unexpected for Microsoft to have their own distro so they are in control. It's unlikely to spread beyond its use case (Azure) unless it has some magical properties all the other ones miss (and can overcome the brand issue).
If you're worried about Microsoft's effect on Linux (3E etc), look at who is working on the kernel and the core libraries, and who is paid by microsoft.
In the end Linux is software, defined by code, defined by those who implement it.
Sure, there will be lkml discussions on key decisions, but at this point a big part of the work on Linux is done by 'pay as you need'.
That is not necessarily bad (tm), until one company becomes a dominating factor or locks down Linux by tying it to proprietary or monolithic components it controls (potentially SB/Sys-D).
If you want to move away from that, you will need someone else to pick up the tab.
Some countries are investing in open source as a strategic commitment (as well they should), there is no reason you cannot fund engineers from UKRI/NSERC/Horizon/NIH programs to shore up key infrastructure.
RT Linux is now coming (or few days ago depending on upstream), that has major implications for national infrastructure, so why not lean into it. Pay a few key maintainers for the work they do that invisibly makes society work. Perhaps not as well paid as big tech, but there are ways of making that up by govt (tax, benefits, pensions). In terms of budgets it's a best a rounding error on the rounding error.
If you don't, others defined by VC/greed will, and there may be happy accidental benefits, but greed never leads to anything good in the long term.