Interesting theory here. So, basically, the idea is Sarah is being dead-ended? And that this might be due to failure of growth for Game Pass?
Well that would kinda suck for her; Game Pass wasn't her pitch, it was Good Guy Phil™'s. But growing that type of model without, y'know, games, was always going to be hard with a brand facing declining relevance. So if she's not in a position to take Phil's spot if he retires, and the COO is, then hopefully the COO has an actually refreshing perspective for Xbox hardware.
Personally I think Microsoft might actually be planning to transition Xbox off the normal console business model altogether, after all. And they're having Sarah Bond oversee all of that. Whether she stays on after that transition is complete is anyone's guess but it is rather damning she's the only one among the flock with a position explicitly related to Xbox and not Microsoft Gaming.
Of course a lot of this is my own ideas for the brand; the traditional console business model isn't a winning game or suitable avenue for Microsoft going forward. They don't have to stop making gaming hardware, but they would benefit much more aligning it significantly closer to PC and Windows at the consumer end.