Though they never actually dropped C99 support, they never had full C99 support to begin with. C has long been a second class citizen (compared to C++) under MS's development tools.
They had C99 support to the extent required by ISO C++ compliance.
The backtrack from "we don't need C anymore" is most likely driven by, WSL, Azure Sphere OS, Azure RTOS, and above all probably some vocal customers with enough power to make it matter.
Even the Windows kernel team dropped the COM based userspace drivers framework, replacing it for a C based one.
In any case, everything from C99 that became optional in C11 isn't planned to ever be supported.