As a longtime PC gamer, any Microsoft store is roughly 0 threat to Steam from my perspective unless publishers stop publishing on Steam, which would seems very unlikely unless Microsoft took much less of a cut and Valve refused to follow suit, or Microsoft decided to pay publishers off for exclusives. Microsoft's past attempts to make Steam-like services have been completely laughable/extremely frustrating (see Games for Windows Live, their attempt at an online community/DRM solution).

I think they're expanding to Linux entirely because they want to expand to and support Linux, not because of any competitive pressure forcing them to retreat to Linux. A couple years ago they expanded to Mac, and this is just a natural extension.