Android is built on Linux, and it seems to do just fine despite the kernel being GPL'd.

"just fine" isn't perfectly true. The bionic interface they somehow "wash" from GPL headers to BSD headers is questionable.

Nope, there is nothing questionable about it. Linus himself has stated it: http://www.groklaw.net/articlebasic.php?story=20110322014831...

That's interesting. Still, there are a huge number of copyright holders of the linux kernel and some may have a different opinion on the legalese applies.

And would all Windows developers leave? Most I bump into see Linux as a toy still, despite the ever-growing army of vocal Python developers who favour development on the platform (if you love slow GUI programs, Python sure is the way to go!)

WebOS and Jolla had/have a ton of closed source components(pretty much the whole GUI) but run on top of Linux so there's a loophole somehere.

There is no loophole, the Linux license explicitly allows usermode apps to use the (GPL-licensed) interface headers without requiring the app to be GPL. See https://github.com/torvalds/linux/blob/master/COPYING