Over the past few years, Microsoft has been increasingly endorsing the Linux Kernel. They allow running a stripped down version of GNU/Linux distros in Windows, and Microsoft Azure uses Linux nowadays.
What if Microsoft decides to make a version of Windows with the Linux Kernel, and continue to release it as a proprietary operating system (and only release their kernel under GPL2)?
Suppose they say, "Our kernel is free and open source (you can look up here for the source), but the rest of the OS is non-free (and we won't allow you to modify or redistribute it)". Can they legally do that?