That "region" is a very big market. So that is not really an option for them. On the other hand large parts of the economy and government in the EU are totally dependant on Microsoft products and would be screwed if they would pull the plug.
IMO, abandoning the EU would be fatal to MS, not exactly because of lost revenue but because of second order effects. But I didn't want to put my opinion on the GP post.
Munich itself is weird case. There some smaller municipalities which have done better with Linux, lower-saxony and the police and the recent switch to Matrix of the Army.
Regarding Munich:
Three competing IT-Departments! Repeat, three. An own special distribution. They didn’t migrated all applications (either do it or not) and a lot of stuff was always done on Windows. Finally Microsoft moved a headquarter to Munich and solved it with “tax money”.
Rumors say that the reverse migration to Microsoft itself was also “bumpy”. Let me guess, three IT-Departments?
The former major of Munich also gave an interesting interview about the “experience”.
They wouldn't abandon the market, they'd just introduce a complying version for Europe like N or K versions in the past. That way they can continue to screw everyone else.