If Microsoft starts subsidizing Game Pass games from their other businesses (like Amazon, Google and Apple do for their other services), it'll make the business model of actually selling games unviable by pure race to the bottom. As a result, you'll lose independent development and market diversity because everyone will need to beg Microsoft (and maybe Sony and Apple as other megacorps) for money scraps.
This is very similar what actually happened in mobile games market - a race to the bottom that only left a few winners filled with exploitative anti-patterns that feed on peoples addiction to recoup their costs instead of selling the product.
It'll of course be amazing for users - games will be cheap! And free! Just like views on YouTube are, where creators are getting more and more burned out fighting against the algorithm which decides how much they deserve to be paid.