Porting a game requires very little effort or resources on the part of the dev team. So any concern about that causing some kind of delay is a very unreasonable take.

But will it be backwards compatible or just a PC-like handheld like Steamdeck? If they want backwards compatibility, it needs to run at least like series S right?

What are the Pros/Cons of using Xbox OS vs Windows OS?

Pros of Xbox OS

• We will keep access to our digital libraries.
• All our Xbox purchase licenses will be available on the handheld as well.

Cons of Xbox OS

• No access to Steam.
• Purchases would have to be made via Xbox store, not every Windows Store is Play Anywhere.

Pros of Windows OS

• Access to Steam giving a much larger library.
• It's more future proof than an Xbox OS.

Cons of Windows OS

• We'd lose access a lot of our Xbox library, have to rebuy a bunch of stuff.

Could they simply use a Windows OS but also using the Xbox Store from the Console?

It really feels like this should have always been Microsoft's end goal, to unify the stores into one universal store, having our purchases across Xbox, PC and Handheld, not having to rely on a developer opting into "Play Anywhere", Steam Deck doesn't require people to rebuy anything, as it's still the Steam store, Xbox's issue is that Windows Store and Xbox Store are still technically, financially, licensing, separate.

And typically doesn't even use the same team as those who are working on original development...

It's like we're just throwing stuff at a wall to be angry about now, Lol.

• Sea of Thieves PORT is not going to affect Everwild DEVELOPMENT
• Pentiment PORT is not going to affect Avowed's DEVELOPMENT
• Hi-Fi Rush PORT is not going to affect Tango's Next IP DEVELOPMENT

Games don't start Day 1 in FULL SCALE PRODUCTION MODE NEEDS EVERY EMPLOYEE ON DECK to their final release.

Nor do developers all share the same skillset, or are needed all at the same time, Lol.

I'm over here on PC seeing ports that had little to no effort

There's a possibility it could be directly tied to the Xbox store. Like a mobile Series S essentially. Maybe throw in cloud streaming capabilities. 

The single major issue with this idea is damn licenses, Lol.

• Xbox OS/Store? Keep our Xbox libraries.
• Windows OS/Store? Lose some of our Xbox library, however, may gain access to Steam.

I honestly don't know what one I want more.

Not even ALL 1st party are Play Anywhere IIRC?

In hindsight, I really feel like Microsoft should have merged the stores years ago, maybe before Xbox Series X, Lol.

Hard to say tbh. As Ryuu pointed out before, it would likely be pretty difficult for an Xbox handheld to be BC simply because the Xbox store on the console and Windows store operate separately for the most part (play anywhere titles being the exception). So most of the games you bought on Xbox wouldn't work on Xbox handheld if MS makes it run on Windows OS. If they make it have the same OS as the Series X/XB1 then it'd be far easier for MS to make that BC and work with your current library of games. 

MS is a software company at its core so maybe they can get it to work somehow.

Is it feasible for a hypothetical handheld to have dual boot OS? Lol.

So one OS is the Xbox one, with access to the Xbox Store, the other OS is Windows, with access to the Windows Store + Steam.

That just makes things awkward for developers though.

Best solution to me is a true merging of the stores but it doesn't fix the "old licenses" issue.