What are your sources for this?

Media create had the game selling 260k in 2019 (21st best selling game). It doesn't even chart the top 100 for 2020 with game 100, GT Sport, only selling 36k. So by the end of 2020 it has sold less than 300k. You are saying that 100K came from digital sales?

Other things you need to consider is that

1) XSX is a sales disaster in Japan.

2) Those Death Stranding sales take into account the existing PS4 fanbase in Japan, and

3) JPN devs are not using Japanese sales to determine whether they support XB or not: they are using WW data, because that is where the money is (unless you are the Switch, then every region is game).

MS getting a Kojima exclusive has almost nothing to do with Japan as a region. 

Did Death Stranding flop then? Surely if it had done well then Sony would've wanted to continue working with him.

It's on the wikipedia page from Death Stranding, but the website they have sourced seems to be down for maintenance right now:

https://en.wikipedia.org/wiki/Death_Stranding#Sales

"As of March 2020, the game's sales in Japan have reached 262,827 physical copies and an estimated 136,279 digital copies, for an estimated total of 399,106 sales in Japan."

To respond to your other points:

1. I wouldn't call Series S|X a sales disaster in Japan, sure it's not exactly lighting up the sales charts, but it's severely supply constrained and would be tracking well ahead of XB1 in Japan were it not for the supply issues, as demand for it so far seems considerably higher than XB1, with retail stores selling out of Xbox Series restocks in less than an hour, and online restocks selling out even faster. For the past few weeks it has actually been gaining on XB1 launch aligned, in spite of the supply issues.

2. Never said that it didn't, but there is no doubt that Kojima's name carries weight in Japan, this game could boost Xbox Series sales there a good bit. Obviously 400k sales in Japan like Death Stranding, on Xbox, are unlikely, but with Kojima's name carrying weight in Japan, I wouldn't be surprised to see this exclusive game (alongside a few other JP exclusives from Tango and a few other devs) helping to move Xbox Series lifetime numbers that are closer to OG Xbox (530k) than to XB1 (120k), and helping to boost xCloud/Gamepass subs in Japan as well.

3. While worldwide sales are definitely important to some JP devs, and many who care about worldwide are releasing on Xbox these days, I'd say that there are definitely some JP devs who mainly care about performance in Japan. It's an old fashioned viewpoint that is dying out, but does still exist to some degree. There is a reason why Xbox 360, which had the highest sales of all Xbox consoles in Japan (1.6m) also got the best JP 3rd party support of all the Xbox consoles. Xbox Series selling decently in Japan (and xCloud doing well there) could attract a few of those devs and publishers who currently avoid Xbox like the plague (NIS, Gust, Marvelous, just to name a few of them). 

Kojima at this point appeals to westerners more than Japan. Even Sony is not appealing to Japan anymore.

I mean, Japan isn't the centre stage country for gaming like it was decades ago, it's now more Europe and the West that are the bigger audiences and players in this industry now, so I can see why Sony's moved. 

Sony do not own kojima production so MS could have just handed over a bigger check. These are talks so nothing is confirmed. Gamepass could also be of appeal in order to reach a wider audience.

Regarding Death Stranding, it wasn't a flop but I could see how Sony might  not want to put similarly niche titles at the forefront of their marketing. For how expensive it looks, its extremely polarising and unlike all the other games Sony has been pushing.

The US is the largest market but that wasn't the point. Some think this will move the needle in Japan for Xbox consoles. It won't. It would barely register at all.

1. While it theoretically could be selling faster than the X1, that isn't exactly saying much considering how much slower the X1 sold to 360, which itself sold slower than the original X1.

XSX is at 40k. 360 was already past 125k. So unless there is some huge resurgence when stock does normalise, those sales don't sound great at all. 

2. The potential for GamePass / xCloud is rally the only factor here that seems worth it for MS. More Japanese exclusives do not necessarily mean more Japanese consumer support. But yes, Kojima's name carries weight, so it will move heads. I just don't see it being anything truly tangible, at least not until we know what game he is actually working on.

3. 360 got the best JPN support because 1) MS tried to invest in the market in a way they never did on the original XB, 2) because a niche for sertain types of games formed, and 3) because 360 sold well WW. 

Now, point 1 doesn't seem like it will be as high a jump as before. MS has been courting JPN devs for the last few years. the 2nd is irrelevant to MS now because Switch and PC would be more viable choices in the current marketplace. 3 is the same as it was last gen. 

I don't deny that what you say is true. I question the impact, and think these ultimately mean less for XB and JPN. But I can definitely see GamePass being important.

I imagine this could be possible, Microsoft definitively has enough cash to throw around in this kinds of projects if they wanted to. Though Kojima would need to keep an eye on being more down to earth and less of an abstract auteur. While it sold well enough, Kojima's studio won't be able to survive another Death Stranding.

I don't think anything will at this point, and I don't think anyone's going to bother going forward tbh.