I think it’s slightly more complex than that. Apple included in their processor design custom extensions to ARM that alter things like memory order to make emulation easier [1]. It’s not just control over the software stack that makes Rosetta so performant.
Microsoft and NVidia have a history of collaborating to adapt Windows APIs to NVidia hardware. DirectX 10 was practically designed to NVidia's next-gen hardware spec.
If Microsoft is serious about ARM, there's no reason they couldn't work together to ensure the CPU is optimized for Microsoft's emulation layer.
In general Microsoft are in favour of doing anything that sells more copies of Windows and I have no doubt supporting an extremely fast Nvidia CPU on ARM is possible. It might never run software as well as x86 but maybe if it ends up being faster for games (which could be possible with MS and NVDA support) then people will buy it.
> Nvidia is a software company, but i doubt they want to deal with making decades of windows binaries work.
Isn't Nvidia already doing this with their drivers? Games are notorious for suboptimal or downright incorrect graphics API calls that get patched in the graphics driver on a per-game basis - at least for the AA games in the past.
[1] https://github.com/saagarjha/TSOEnabler