You can’t just move the goalposts like that. OP claimed win9x was ‘peak windows’. If you concede it wasn’t great but then want to say WinXP was ‘peak windows’ (good luck making that claim stick with anyone who remembers it) you’re making a different claim.
The goalpost to me is 'An OS doesn't need to doesn't feel like shit on reasonable hardware'. Windows 95 does that with flying colours. So does XP. The only reason they ever felt slow was because they were on mechanical drives. If everything you had open was in RAM and you didn't need to swap to disk, they both worked great. Now there are SSDs, so that problem went away, but modern Windows and many common programs managed make that problem come back despite SSDs and modern processor being lightning fast. And it's not like doing that is impossible. There are modern programs that manage to make good use of the hardware.
There's not much I can see that prevents us from having both a UI that doesn't feel like shit and is featureful. Linux isn't too far off in many cases. The whole idea that modern Windows is slow because it's packed with features is one I reject.