Disclaimer: I work for Microsoft, though I wasn't there during the early days of .NET or Windows Longhorn.

C# was created as a Java competitor. Although it had great C interoperability, the underlying .NET Framework was still a VM-based runtime with a garbage collector and all the disadvantages that brings. You can probably find various articles (https://longhorn.ms/the-reset/ is one) discussing attempts to adopt C#/.NET code for Windows Longhorn, which ultimately had to be walked back completely. .NET wasn't purpose-built for writing OS components or working deep inside existing Windows code.

Apple learned from this and other examples. The Swift team actively works with teams at Apple deep in native code to make sure they can handle their use cases without performance penalties, and with minimal ergonomic issues.

The difference is really about what the stated goals of the language were/are.

Thank you to share. My guess: In the year 2000, it was impossible with current desktop computing power to use C# for OS internals. In 2024, it is a different story.