Originally, the expectation was that WinUI3 would have support for both "Desktop" and "UWP" app models.
The focus was initially on Desktop with the promise that UWP would follow. Now, it's looking more and more likely that UWP might never be fully supported by WinUI3.
I can see this as a realistic scenario. The intention might be that one-day UWP support is added but it looks like it's very low priority and there are a lot of other things in front of it.
So, what if you have a UWP app?
If your app is only used on a desktop/PC then consider converting it to WinUI. Probably wait for WinAppSDK v1.0 and check that everything you need is possible in WinUI3 but that's your future.
If your UWP app is for use on desktop/PC and Xbox then you'll need to stick with UWP while we wait on future announcements.
If you're still hoping for a return of Windows Phone, then I can't help you.
Or, you could just keep it as it is. It should be good for a few more years at least.
