WP may be dead really, but Windows Mobile, the leaks about x86 phones, an win32 emulator for arm, and desktop returning to arm devices gives us a very clear view of Ms current strategy.
They are going for a platform convergence on a myriad of devices, and with continuum to have the platform changing with the device changing too.
If they succeed, they will have phones that has a very nice touch interface, capable of running powerful apps natively, but that when connected to external devices can give you all the freedom and productivity only a mouse/keyboard and more real screen state can provide. And it doesn't matter if your device is arm or x86, you just plug in and your apps become remarkably more powerful, and you gain years of desktop software to run.
If you look at the point of view, Ms handling of the OS kinda makes sense. You are not there yet with your platform or even the hardware that will power it. You have no marketshare, and your attempts to keep that marketshare results in you losing money. In that sense 950 and 950XL makes sense, they give the current users of the platform the phone they've been waiting, it keeps the money from bleeding, and you can then focus on getting the platform ready so it can really be a disruptive thing.
In that sense, getting the microsoft experience on other devices also make sense. There's a ton of users who grew up on ipad and iphones, and had limited contact with a pc. Ms needs to get the market to want to use Ms software if it wants to succeed into launching a new experience that relies on people wanting to use said applications in the first place.
Even the app situation is not currently all bad. Windows 10 going strong as a whole is driving development of universal apps that can be easily adjusted to supported small screen sizes, so by the time Ms comes full force on phones that can be a desktop the app ecosystem will be much healthier, even for phones.
Of course that's a bet, but I can see Ms building work first phones, that happen to be a very good experience for the end user in a way that it decides to switch for his personal device as well being a safer bet than releasing one device poised to save the system.