It probably played a pretty big role. Everything Atom could do, VsCode could do better. At some point it didn't make sense to put man-hours into two different editors with the exact same technology stack.

Not likely, GitHub is a separate business and makes their own decisions.

MS also competes with GitHub also; Azure Repos are a thing, as is Azure DevOps and those are just two examples. MS has plenty of products that compete with each other.

In some spaces this is a good strategy as you will capture more market share with two products than you will with one and you can avoid to an extent monopoly claims.

GitHub Codespaces is what killed Atom and while MS was probably involved in the decision to develop Codespaces, the decision to sunset Atom likely wasn't explicitly made at that time; its simply a side affect as other things have eclipsed Atom.