It's a serious win-win for both of them to make running the ARM64 version of Windows 10 run on Apple Silicon Macs.
Yes, and Microsoft and Apple both stand A LOT to gain by collaborating to rectify this.
That was my initial gut reaction too, but thinking about it... what
is in that for either Microsoft or Apple, especially if you're talking about direct booting rather than virtualisation?
A lot of people who exclusively use MacOS
also buy/subscribe to MS Office and use email services that are ultimately provided by Microsoft... and I suspect that services, rather than OS sales, are increasingly the mainstay of MS's business. As for OS sales, they really don't want to tick off their huge army of OEM PC makers by collaborating with Apple to make Mac the "best Windows system". They are already walking the tightrope with their Surface range (which I'd say, as a consequence, are designed and priced specifically to compete with
Apple rather than other PC makers).
What Microsoft
really needs is "Microsoft Silicon" (or maybe NVIDIA Silicon, or
even 'Intel Silicon') - optimised for Windows/DirectX the way that M1 is optimised for MacOS/Metal - that can be sold to PC OEMs - in which case they'll want it to be competing with Intel Core (which is an easy win) rather than Apple M1.
The reality is, died-in-the-wool Wintel users are
not going to be switching en masse to Apple Silicon just because it may be "better" - if the best hardware/software always won the market
everybody would be using Apples, Amigas or Acorns today, and the PC would have been laughed off stage on day one.
Meanwhile, Apple, likewise, is increasingly focussed on (a) services and (b) seamless integration between Mac/iPhone/iPad/Watch/Homekit - and the best way to sell people Apple services is to have them either using MacOS
exclusively or - if they really have to have Windows compatibility - using virtualisation to run their must-have Windows Apps
alongside a mostly MacOS workflow. If people spend significant time booted into Windows then they're going to look to cross-platform services and mobile devices etc. that work well with Windows (Spotify instead of Music, Dropbox/OneDrive/Google instead of iCloud, Steam instead of Arcade etc...)
So while I'm pretty sure that Win10 for ARM virtualisation is going to happen (and it looks like its 90% working already) I'm not sure that anybody has an incentive to work on direct booting.
APFS and dynamic disk partitioning renders your concerns here moot.
Does that even work with NTFS on the Windows side? Does it make re-arranging your partitions as easy as dragging the virtual disk file off onto an external drive? Cut & Paste between Windows and MacOS Apps? Snapshots (of NTFS, not APFS)?
I'm not saying it won't suffice for most, but I wouldn't go so far as saying that it's "the best" solution.
I said best "for a large proportion of users" and stand by that - unless you
really need native performance (for serious creative/scientific apps, serious gaming etc.) virtualisation is far more convenient and flexible. Often, it is just one annoying bit of productivity or business/accounting/tax software, or that one obscure tool that runs fine on anything better than a 486, that means people need access to Windows. Legacy software is usually fine with legacy performance - and it's looking like M!-based virtualisation is
way better than that.