Not a windows user so knowledge is a bit fuzzy, but I remember the one of the advantages of MSIX being that the actual installers have less system access, but not sure if the applications once installed are any different.
Yeah with MSIX, the security is better for end users, but the trade off is there's a lot less flexibility for developers (limits on custom installs, accessing registry, Custom Actions, etc.) This works out fine for most desktop apps, and MSI is still used and supported.
They don't have to be. I have a traditional non-sandboxed app with an MSIX installer. It's less flexible than MSI but it doesn't mandate a sandbox for the installed application.