Yes, I can clear this up.
The UWP isn't going anywhere. It includes a set of APIs that exist on all modern versions of Windows, be that IoT, Mobile, Holographic, and Server/Pro/Home editions of the full Windows OS.
While bringing the Win32 APIs and x86 emulation to ARM devices will allow us to run traditional Win32 x86 desktop software on them, that only works for devices running Server/Pro/Home editions of full Windows OS. That software will not run on the more modern versions of Windows that ship without the full Win32 APIs like Holographic, IoT and Mobile. So, this new emulation capability does nothing for developers who would like to target the full range of form factors with a single program. That still requires an UWP app, because only UWP is supported on all form factors that Windows runs on.
Win32 x86 software running on phablet sized devices also won't be usable on phablet sized screens with your finger, nor will their UI adapt to different screen sizes in the way continuum enabled UWP apps can. So while you can hook up such an ARM phablet to an external monitor, mouse and keyboard and then have a full desktop at your disposal, this isn't comparable to continuum enabled apps who's UI can be easily made to scale between almost any size display, while supporting all mainstream input methods like touch, mouse, keyboard, pen, voice, etc. (those tech websites reporting that these emulated Win32 x86 desktop apps will support continuum, the ability to adapt their UI, are incorrect).
Last but not least, running full Windows also comes with all the well known drawbacks, i.e. all the administrative tasks and maintenance, security risks and malware, slow degradation of the Windows installation as more software is installed that bloats the registry and barfs files all over you file system, etc. Getting rid of these problems was one of the main reasons WinRT and now UWP exists in the first place. The full Windows OS will never solve those issues. That's one of the reasons MS no longer sees full Windows as a consumer friendly OS, which is why UWP is the future for consumers. At least in the consumer space, it's UWP or bust.
In summary, a widely supported UWP is still the end game. Getting Win32 x86 desktop software onto a phablet sized device (a full PC in your pocket) is more of a stopgap measure to fill in for the current lack of UWP software. It may also be a strategy to get the full Windows OS onto cheaper devices, as the ARM chips capable of providing this feature are about $200 cheaper than the most comparable Intel based alternative.
We likely wouldn't be getting this feature if the UWP had taken off in a big way and every developer was creating apps for it and porting over their existing Win32 software.