MSIX gets conflated with UWP but these days they are separate.
For a while, Microsoft tried to insist that Store apps were UWP apps, but UWP was basically a new OS platform and not really backwards compatible at all. By then though most Windows code had been written and wasn't being rewritten due to new development, so this attempt to get people off Win32 failed. Devs just rejected the store instead.
Project Reunion tried to fix this by bringing together the UWP and Win32 worlds. As part of that MSIX did indeed become available outside the app store and for Win32 apps which run as "full trust" i.e. with all permissions, and it was indeed unfortunately quite buggy. However, some bugs are fixed and others can be worked around. Conveyor [1] is a packaging tool (disclosure: made by my company) that can make and sign MSIX files from any platform, and it works around those bugs so you get a reliable install experience and of course, all the nice MSIX features that motivated the technology in the first place like Windows keeping your app up to date in the background, delta upgrades, sharing of files between different apps, clean uninstalls, being installable without admin privs and so on.
You don't have to code sign apps, btw. If you're OK with requiring admin escalation then Conveyor will self-sign your MSIX and install the relevant cert using a small stub EXE that the user invokes. This lets you get the MSIX feature set without paying for certificates. It's not really recommended though for anything except open source apps, as virus scanners will molest your processes in various ways.
That said, getting into the MS Store costs $19 for an individual and then MS code signs it for you, so it's cheap and easy. Conveyor can also release through that, including from Linux/macOS, after you get approved, but the approval process is more of a handwave these days than anything else.
So that's the current state of play. Win32 apps, unsandboxed, distributed either in or out of the store using MSIX, signed or unsigned. Now Microsoft is working on bringing sandboxing and permissions to the Win32 world, not just for UWP apps. However it'll still only work for MSIXs.
For a while, Microsoft tried to insist that Store apps were UWP apps, but UWP was basically a new OS platform and not really backwards compatible at all. By then though most Windows code had been written and wasn't being rewritten due to new development, so this attempt to get people off Win32 failed. Devs just rejected the store instead.
Project Reunion tried to fix this by bringing together the UWP and Win32 worlds. As part of that MSIX did indeed become available outside the app store and for Win32 apps which run as "full trust" i.e. with all permissions, and it was indeed unfortunately quite buggy. However, some bugs are fixed and others can be worked around. Conveyor [1] is a packaging tool (disclosure: made by my company) that can make and sign MSIX files from any platform, and it works around those bugs so you get a reliable install experience and of course, all the nice MSIX features that motivated the technology in the first place like Windows keeping your app up to date in the background, delta upgrades, sharing of files between different apps, clean uninstalls, being installable without admin privs and so on.
You don't have to code sign apps, btw. If you're OK with requiring admin escalation then Conveyor will self-sign your MSIX and install the relevant cert using a small stub EXE that the user invokes. This lets you get the MSIX feature set without paying for certificates. It's not really recommended though for anything except open source apps, as virus scanners will molest your processes in various ways.
That said, getting into the MS Store costs $19 for an individual and then MS code signs it for you, so it's cheap and easy. Conveyor can also release through that, including from Linux/macOS, after you get approved, but the approval process is more of a handwave these days than anything else.
So that's the current state of play. Win32 apps, unsandboxed, distributed either in or out of the store using MSIX, signed or unsigned. Now Microsoft is working on bringing sandboxing and permissions to the Win32 world, not just for UWP apps. However it'll still only work for MSIXs.
[1] https://hydraulic.dev/