Maybe it was the microfiber cloth, maybe not. How often do you use it? Do you occasionally wash the cloth?
The way I'd look at it is, you use/carry around the iPhone at least 12 hours a day. It can get scratched while in a pocket or purse, from grit on a finger while swiping... just about any use at all can expose it to potential damage. So it's hard to know the real cause. Accidents happen.
Still, each rub-down with a cloth carries the potential of pushing some piece of grit across the screen - the more often you wipe, the greater the risk. If you're wiping it down daily, or more frequently than that... I'd suggest you're wiping it too much.
If you look at the display from a certain angle, you'll see fingerprints. Fingerprints are inevitable. They'll be back just moments after you wipe the screen. It's a touchscreen display, after all. However, it takes a lot of fingerprints before they actually affect your ability to read the display (or the Face ID sensors to read your face). So long as your fingers aren't transferring something other than skin oils to the display (in other words, your fingers are reasonably clean), or the display doesn't pick up droplets of debris (from things like sneezes or drips of food juices) I feel there's there's not much reason to wipe the screen.
My iPhone X is approaching 3 years old. I've never used a screen protector. When I look at it from certain angles I can see a fair number of very light scratches. Most of them are vertical - it's logical to assume that they happened while slipping them in to and out of my pocket. The scratches have absolutely no impact on my use of the thing, so I don't worry about it. I have no plans to sell it for top dollar when I'm done with it - it'll be over three years old, with or without scratches I won't be getting a ton of money for it.
Effectively, the only way to prevent wear-and-tear is to leave it in its box. But if you have a highly useful tool (whether it's a smartphone, a favorite frying pan, or a set of wrenches), it's eventually going to show signs of that use. It's only the stuff that's not at all useful that stays in pristine condition.
(Added) And about screen protectors... Touchscreens come with an oleophobic coating (oil-resistant). While I'm sure there are plenty of screen protectors that have equally-good oleophobic coatings, I suspect there are others that have sub-standard coatings, or none. The poorer the coating, the more likely you'll have to wipe the display. And so it goes.
