A lot of people who use excel heavily are not really “programmers” and don’t have strong fundamentals or an appetite to manage their own software stack. This also simplifies development on MS end by only needing to validate a single python version.
This seems like the only solution. Do not copy all of Python’s warts, but offer a curated experience. Microsoft Experience (TM) with fixed APIs, no package management or dealing with ecosystem churn.
It will never work because Python is the ecosystem. Having Python without the ability to tap the huge catalogue of existing software makes the integration worthless. The first thing someone will want to do is use Pandas on a live spreadsheet.