Reading over the article again, this is the key thing Jez says. Taking his "sources" as gospel truth for an insane moment here......
Indeed, the Xbox Ally and Xbox Ally X, with its Xbox Full Screen Experience, is essentially what the next Xbox will look like. It's not dissimilar to the SteamOS interface and Big Picture Mode, which allows you to exit out into full Linux at will. Similarly, the Xbox Full Screen Experience will allow you to exit out to full Windows if you want to, and run competing stores like Steam, Epic Games Store, Microsoft's own Battle.net, the Riot Client, and indeed anything else you want. Indeed, you could run Adobe CC or Microsoft Office on the next Xbox, if you so choose.
Where the Xbox console will differ from a traditional Windows PC is that it will feel like a traditional Xbox console out of the box. The onboarding experience will be similar to what you get today on console, and if you choose, you can remain fully inside the Xbox ecosystem, never touching Windows itself. Exiting out to Windows will be for those who want to access games traditionally not available on Xbox, including PlayStation games on Steam, mouse and keyboard-first games like League of Legends, or even classic games from GOG and the like.
As others have pointed out many times, this is Xbox's version of Steam Full Picture mode. Full-bore Windows. The interesting part is how are they going to implement "your entire Xbox console library" (Xbox consoles don't even do that). Will have to be emulation, I guess.