Yeah, it’s a mess. It seems like eventually they figured out that UWP’s sandbox+packaging requirements were a huge mistake (see Project Reunion/Windows App SDK), but that realization came much too late.
I developed for UWP, though during the early days when windows phone 10 was still a thing. Honestly it wasn't the sandboxing that turned out to be the biggest problem (see all electron apps nowadays) but that the UWP Plattform was just shit in every way possible, from the design language that forced a desktop to become a phone, the store that never got any traction or quality support, the SDK that needed at least 3 more years of hard work and lots of extensions to become useful but most importantly: The terrible monetization. Microsoft entered a market with android and iphones making developers and companys a lot of money, yet on windows phone and UWP Apps on Desktop it was impossible to make any decent amount of cash.
Yeah, I'm fond of the AppContainer sandbox in a way; I think most consumer applications can get by in a sandbox (my UWP app could), and sandboxing applications can be empowering for users since it lets them run more code without worrying about trust.
Unfortunately, the execution was a mess. Not having any way to opt out of the sandbox was an insane decision and it led to crazy workarounds; even first-party Windows software has to do things like ship a sidecar exe to bypass the sandbox (the Store does). And troubleshooting issues with the sandbox was a pain, configuring capabilities was a pain, and there was very little in the way of iOS-style user-facing permission controls.
And don't get me started on the marketing; MS flacks kept telling devs how sandboxing benefits users while doing virtually nothing to convey those benefits to users.
