Microsoft's had ARM versions of Windows for a while now. The only reason you can't install it on an ARM macbook is because Apple doesn't support it.
The main reason you can't install Windows-for-ARM natively on an ARM MacBook is that it would be significant work to write and maintain bare-metal kernel, drivers, bootloaders etc. that worked with Apple Silicon, work which would in practice need to be done by Microsoft - since Windows is closed-source - who have no interest in promoting Apple Silicon.
x86 PCs have fairly standardised architecture & firmware, use the same range of GPUs etc. plus anybody making PC hardware is pretty much obliged to supply Windows drivers. Intel Macs - especially. pre-T1/T2 - were basically PC clones, once Apple had added a BIOS compatibility module to the standard firmware, some models could boot and install from a standard Windows install disc. BootCamp on Intel Macs was mostly a set of click-and-drool tools to do the hackery of setting up a dual boot system, tweaking the Windows installer and installing the correct drivers. ARM systems are more diverse - there are standards for boot/firmware etc. but Apple Silicon does its own thing, and of course all of the GPU, Media Engine, Neural Engine etc. are Apple proprietary.
There's nothing actually blocking alternative OSs - there's already a rapidly-developing Linux distro that runs directly on Apple Silicon (which anybody can work on because it's all open source). Apple doesn't actively support it mainly because it doesn't really have a use: you
can run Windows for ARM in Parallels/VMWare/UTM etc. where it runs in a simulation of compatible hardware, and the drivers are just stubs that call the host MacOS drivers. That's a more flexible solution for most people. One of the big advantages of Bootcamp on x86 was that it could access MacOS-unsupported hardware and the GPU etc. drivers from AMD/NVIDIA were sometimes better than the MacOS ones - on Apple Silicon the "native" Windows drivers would be playing catch-up with MacOS.
There's also been speculation that MS have an exclusive agreement to support Windows only on Qualcomm processors - but that's pretty moot: if, in the last 4 years or so, MS
had released Windows for Apple Silicon then the Mac would have absolutely
smoked anything they or other PC makers were doing with Windows-on-ARM - but Apple were hardly going to start selling M-series chips to HP/Dell/Lenovo etc. - and 3rd party vendors are central to MS's Windows business. Wouldn't be great for Apple, either, since they make money from services for the iOS/MacOS ecosystem.
Mac users get the software bundled.
...and then, if they have to interact with non-Mac users, subscribe to Office 365 and Adobe CS anyway (or use Google Docs...)
Server chips in hot demand as they are the foundation of everything on the cloud and AI. What has made Nvidia as much money as they could ever want.
...and there were already plenty of server-grade ARM chips out there from Ampere, Amazon AWS and others to compete with anything Apple came up with. What's more, Apple hasn't made server hardware since they dropped the XServe and they dropped
that for good reason, since two of the Apple's "unique selling points" - the MacOS UI/ecosystem and the design/ergonomics of (particularly) Mac Laptops - are irrelevant to the server market, which is pretty much dominated by Windows Server and, increasingly, Linux. When the PPC XServe was first released there was some appeal to a Unix server without per-user license fees, plus Macs were still dependent on Mac-specific services for file sharing etc. Now, Linux and open protocols rule, and Macs don't need specialised servers.
Apple is a cell phone company that has some other minor products. So Apple when they design a CPU has to think about what is best for the phone, then they put some variation of the phone chip on the Mac.
...and Microsoft is using chips from Qualcomm, who are a company who make their money making chips for... cellphones.
Also - a good CPU for a phone - or, especially, a tablet -
is the basis for a good CPU for a personal laptop (which accounts for the majority of Mac sales). The computing that's going on in a phone
is not fundamentally different from what is going on in a Mac - and in modern "phones", where the phone part is almost forgotten, we're talking about a complex animated UI, video capture and processing, photo editing and re-touching (and a lot of image processing to cope with a tiny lens that, e.g. is incapable of real "bokeh" effects), face and voice recognition, 3d games... Your typical smartphone is probably working harder than your typical MacBook Air. Small, low-power CPU and GPU cores... perfect, that means you can cram more of them on a laptop/desktop chip.
Apple did a fair bit of work developing the M-series technically, but the developer transition kit proved that even an A-series chip was a perfectly credible small desktop system (even if it was only supported for 5 minutes). What Apple also did with the M-series was blow away the largely false idea that the ARM was a toy processor for embedded and cellphone applications and you had to have x86 for "real work". The fact that they're finally getting credible competition from Qualcomm is partly because Apple proved the concept.