They have directions for setting up xcloud on steam deck so I wonder if it’s just an optimization that got messed up. If Microsoft was trying to sabotage Linux there’s far easier ways.
This is a pretty common Microsoft move. Let's them pretend to be good guys for basically no effort, while frustrating anyone who isn't using Microsoft stuff. It's to encourage people on the fence to jump ship.
https://support.microsoft.com/en-us/topic/xbox-cloud-gaming-...