Without the policy like this Microsoft has come up with, there will be risks of lawsuits that can happen to that company by other game companies alike. In fact, there were already past lawsuits from Sony against those who made the Playstation emulators for Windows PC and Dreamcast but eventually, the formally sued ones worked on the same emulation stuffs for later generation Playstation consoles like PS2, PS3, PSP, PS Vita and the list goes on. Also, the emulators are said to be banned from IOS completely but I don’t know if this is true or not and you still can see a bunch of them in the Android app stores.
While chaotic troubles are prevented this way, there’s one problematic workaround, sideloading of UWP apps. Hopefully, there should be a policy against this that can be done in Group Policy but this is still a problem when it comes to non-business devices and especially Xbox One. Another workaround is the fact that there online emulators that can be played on the web browser.