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It sounds to me like you are describing Linux desktops.

Or Windows up to Windows ME.

I believe confusing UI with OS is a mistake Windows users are still paying to this day. Thanks to NeXT, Mac users don't have this torment since MacOS 9.

I'm assuming something more like Qubes, with proper isolation between groups of processes.

It's an interesting idea, I've never tried it. It could also be a simple VM running a given OS (with reduced need for hardware support), or an application running interpreted code with the environment UI.

Generally the idea is to expand UX in more interesting/fun directions without incurring significant hurdles associated with an OS (where everything needs to run reliably and be secure).

I've found this quite interesting related discussion: "Classical "Single user computers" were a flawed or at least limited idea" https://utcc.utoronto.ca/~cks/space/blog/tech/SingleUserComp... (discussion on lobste.rs: https://lobste.rs/s/plkdy5/classical_single_user_computers_w...)

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