The full-screen Xbox experience is here
www.theverge.com
They could be playing a word games, where "managing" your library doesn't include the capability to launch games in the native, fullscreen mode itself, but it sounds like you will be able to play at least Steam, EA, and Battle.net games directly from there. They said "major" launchers, but I haven't seen even Epic confirmed, and considering Epic's close ties with Playstation, I suspect that may not be functional in the primary fullscreen "console" OS.
Additionally, during startup, they have apparently made it very easy to simply boot into a full version of OS instead with the click of a button. So it's even easier than a Steam Deck to achieve this secondary boot option. At least from there, for the more tech-savvy, you could install and manage "big box" modes yourself for Epic, GOG, or other launchers potentially not included in the default mode that will integrate well with a handheld, dual-analog joystick interface.
They definitely aren't making money off the hardware. ASUS is gonna eat that. So to answer your question, I don't really know what the hell their strategy is, anymore. Because, yeah, unless there is a severe performance penalty playing from third-party launchers on the device, why wouldn't you just continue buying games on Steam (the best) or elsewhere (whatever is cheapest) like you would with a normal PC?
As best as I can figure, they are banking on integrating as many gamers as they can into their OS schemes: Game Bar, and all the ancillary gaming software (Social monitor where you can see friends' activities, Text Chat, Party Chat, Sound Mixer, Gallery & Screenshot-sharing, Resource Manager including the fps counter, etc). So they're trying to win over PC gamers through that backdoor. Because you have to make yourself an Xbox account and have Xbox friends to use all that.
But of course fuck that. Xbox party chat & text chat fucking sucks. It sucks as much donkey dick as a Mexican midget at a Tijuana diveshow. It couldn't suck harder if it tried. The voice comm stability and quality are
terrible. Sharing screenshots is not intuitive, and it's annoying as hell fighing the privacy settings when all you want to do is share one screenshot, for example, but not make your entire gallery open to be browsed by any friend. Text chat? Half the time you can't even see multimedia someone sent to you by a friend unless you pick up your phone (viewing is nonfunctional on PC). The fps counter is nice, but it's inferior to resources built into NVIDIA software by miles.
Game Bar is in the running for the shittiest software in gaming. It is that bad. Personally, I'd go to the trouble of customizing the secondary full-Windows boot just to have Discord alone. Discord is GOATed.
On top of all this, the very recent revelation that games are apparently running smoother on Linux-based handhelds with Valve's ProtonOS layer
even if they were natively built for Windows has made Windows-based handhelds a lot less attractive. Even if Microsoft subsidizes ASUS to sell this thing at a lower price point this revelation dents the appeal on a bang-for-your-buck criterion to the already highly niche portion of the market that weighs such a consideration.
TL/DR I have no idea what Microsoft is doing, anymore.