If they do that, they won't just shoot themselves in the foot. They'll blow off both their feet. I do hope they realise that.
Gamers will move to Linux (perhaps SteamOS). Rest will just abandon Windows over time as their hardware is no longer supported, and it'll be corporate only.
And... corporate customers will run Windows on nice little hosted Windows 365 desktops in Azure and pay nice big subscription fees for them. And connect to those hosted desktops using... who cares? Two or three months of Windows 365 is probably more profitable than the OEM Windows licence for whatever device is used to connect to Windows 365.
Maybe that's the end goal. They're certainly destroying the market for off-lease corporate desktops with this move. They're telling every enthusiast who has a house full of aging Windows computers of some form or other that, well, they should probably get rid of all of the aging systems. I suspect this is going to push more and more non-gamers in the consumer sphere towards Macs - I can tell you that the second I heard my dad's i5-6xxx laptop would not be supported, I started thinking about how nice it would be for my parents to be all Apple...
But to return to my point - if you were in my shoes with a nice 7700 with 64 gigs of RAM, a 3070, a bunch of SSDs, etc - would you go and build a new 12th gen or Ryzen whatever system in the next 6 months? And if you did... do you seriously think it would be allowed to run Windows 12? And yes, I agree with you - gamers and enthusiasts would go beyond ballistic, but based on the condescending PR from Microsoft that generally supposes "newer PCs are better" (umm... I can walk into Worst Buy tomorrow and pick out 10 PCs that will be dramatically worse than a decent 5-7-year-old box), I don't think they care at all about gamers/enthusiasts. And the argument for the 12th-gen Intel not being supported in Windows 12 is not going to be any different than the 7th-gen not being supported in Windows 11 - I am sure they can make up some BS about reliability, security, etc.