Not interested? Well ... I'm not quite so sure about that.
They seemed to react to competition from Ryzen.
FYI, I'll freely admit that I've not bothered to keep up on all of the Intel CPU news, so please help me out here.
Let's start off with some real basics: just what is it that defines & differentiates a 'Xeon' versus another Intel CPU designs?
My comment was in particular regarding not Xeon, but the new ~dozen-core (up to 18 cores) configurations in Skylake-X and Xeon-W. This is a very different configuration from what was available before.
The reason I ask is that I recall reading somewhere that the support of ECC RAM was pretty much a "flip a bit" configuration change, which (if I'm recalling this correctly) means that ECC RAM support isn't really an architectural difference between the likes of an i7 vs a Xeon.
That's basically true. There are lots of similar situations, such as i7s often "just" being i5s with HyperThreading enabled, or i5s being i3s with additional cores. And sometimes, due to scrap, cores get disabled and then binned as cheaper variants.
Core m3, i3, through i9, and Xeon (since the Core days) are all variants of the same microarchitectures with vastly different target audiences and price ranges. There's typically no need for the same power efficiency features of a 4.5 W CPU in a rack server with enough thermal room for a 120 W CPU. And there's no need for 18 cores in a 12-inch MacBook. ECC is theoretically useful for everyone, but particularly useful in the server area, because servers tend to have the highest uptimes, and higher uptime makes memory errors more likely to occur. (Plus, yes, sure, people are willing to spend more money for ECC, and Intel happily takes it.)
OTOH, Intel does have different concurrent microarchitectures — for example, their Intel Atom CPUs are a different branch of x86. (Core i* / current Xeon is derived from Pentium M, which in turn is a modern variant of Pentium III. Atom, OTOH, is derived from the even earlier original Pentium. Pentium 4 was basically a dead end.)
Confusingly, they currently use the Celeron and Pentium branding both for Core and for Atom products. Their marketing is horrible.
Similarly, locked or unlocked for overclocking ... I again don't see this as a meaningful differentiator for CPU architecture.
Yes. It isn't. It's a way to address different audiences. Most people don't need overclocking. Most of those who do care are OK with paying more.
As I said, I don't know just how functionally different or similar the Xeon and i-Series CPU products are from Intel.
Right. Think of it less as "(most)* Xeons are completely different CPUs" and more as: there's a broad range of CPUs in the same microarchitecture, currently Coffee Lake and siblings (Whiskey Lake, Amber Lake), and depending on your thermal and financial budget, you may want one more around $100 or $2,000, and one more around 4.5 W or 120 W. And if you need to go even below 4.5 W, there's a completely different range known as Atom, and an even smaller one known as Quark. If you need to go beyond Xeon, you can pick Itanium, but that's basically dead.
*) let's not even get into Xeon Phi, which basically isn't a CPU at all.
But I do know that it would be make sense from an Engineering design standpoint for them to maximize design structure modularity and interchangeability,
Sure, but as advisable as that sounds, that's hard enough to do in software, and harder yet in hardware.
but I don't know if this goes to its logical conclusion that both are made from the same mask, and it depends on the post-fab inspections to determine if a discrete part gets QA inspected into Bin "X" or Bin "i",
Because what would theoretically be "good for business" would be for Intel to reduce their proliferation of mask sets, and be able to make both CPUs from a single manufacturing line and mask. The CPUs would be differentiated by a combination of (a) post-fab inspections, (b) chip configuration options, and (c) what their PC customers want ... to determine if a particular CPU gets finished as an i7/i9/etc or as a Xeon. If Intel does have this degree of manufacturing flexibility, then the "niche" of Xeon-W's is an artificial narrowing.
You can remove cores and sell for cheaper, but you can't just keep adding cores inside the package and sell it at a higher price tag. It takes more engineering work than that.