Don was in charge of Xbox from 2007 to 2013; he oversaw some of the 360's strongest years, but he also oversaw the initial Xbox One fiasco (Always online, no used games, weaker but more expensive, mandatory Kinect, TV TV TV, etc) which dealt a blow the brand arguably never recovered from.

Phil took on leadership of Xbox in 2014, and remains in charge today; on his watch, Xbox has ended up where it is today.

Which in your opinion did more damage to their console business, and why?

I don't like overly blaming or praising individuals on decisions likely supported by several people behind the scenes. Don and Phil aren't the only ones to blame for the mess Xbox is in. But it is hilarious how much hate Don got vs the sheer wankery Phil Spencer experienced all these years. Some mfs worship this dude...

Don screwed up in a time where Xbox couldn't afford to. By the time Phil took control, it was hard for Xbox to bounce back. In that sense Don was worse than Phil. But at least Don supported exclusivity, and the Xbox One arguably had a stronger lineup on exclusives than PS4 for the first two years (or at least until Bloodborne came out). Phil Spencer fully supporting PC and eventually/potentially Playstation and Nintendo ensured Xbox's demise as a console. Phil also made quite a few ridiculous remarks over the years showing a serious lack of understanding of the industry and gamers. And whenever we criticized him, an army of weirdos came out defending him and attacking us, the media at large was the biggest culprit.

Satya Narayana Nadella

I don't think it's either of them. Those two are soldiers, taking orders. The strategy for a lot of that stuff comes from above. They're just there to drive it home as best they can. I'm sure Don thought what he was tasked with sucked, but his hands were tied.

What Don did was something that could have been course-corrected in a couple of years. Look at PS3 and its turnaround. Phil has actively been inept and killing the brand since 2015. 

Gamepass did

For all the terrible mistakes the company has taken the past 12 years, and there sure has been many, nothing should ever beat mandatory always-online DRM. That is by far the most anti-consumer move Xbox has ever tried to push. Obviously the leadership has sucked under both Don and Phil, it is probably debatable how much they each are to blame, rather than the higher-ups.
That being said, I am so tired of Phil Spencer, get someone new please.

Don can be congratulated for the Xbox360 era. Arguably Xbox finest. Also Kinect was a success to boost the platform at the time. But then he made a miscalculation with the Xbox1. Overplayed his hand. At least he had a vision, eventhough the vision for the Xbox1 did not work out.

Phil on the other hand almost seems to just trow things at the wall and see what sticks. In a more positive spin one could say he is AB testing. There is course correction upon course correction which leaves the consumer confused. The terrible communication through it all is another reason for consumers to lose trust in the platform.

Satya Nadella

I would argue that Xbox under Spencer did use the first years to course correct: "stupid forced Kinect, stupid always online" - removed; "more expensive than PS4" - corrected; "weaker than PS" - introduce Xbox One S and especially X; "Xbox has no games" - bought a ton of developers. 

But from these course corrections, when building up their own counter value proposition, it simply was not good enough. And from today's perspective I would say at the core Xbox seems to be really poorly set up to manage their studios. There are some devs that just seem to do fine no matter what, but the majority apparently would need some more focused directions and assistance to make great games. Apart from Q4 2021, Xbox for the longest time this gen did not present a compelling output of new games to go and buy an Xbox for. Which is what they would have needed to make a change in the (as mentioned here) very stable console market. 

But Spencer (who, as we know from FTC files thought his masterpiece might be buying Nintendo) apparently overplayed his hand with the ABK acquisition,  snowballing into where we are today. 

I think Matrick-era really severly wounded Xbox console business. I have in mind to have read that Microsoft was ready to shut Xbox down and that Spencer convinced Nadella with the gamepass initiative to keep it going. If that is true you would have to give him credit for once saving Xbox console business, but in the end Spencer-era definitely gave it the coup de grâce. Matrick brought it to hospital, Spencer gave it proper first aid and then failed to change the bandages and give it soemthing to eat (but brought it some flowers and and an iPad to make the hospital room nicer).