Linux

(Copypasting an answer to another comment on this post, slightly modified, here, so it reaches more people.)

I had a MS Surface too a while back.
After installing Linux, it felt like a totally different device. Just like you, I thought "That is how it was supposed to be!".

I strongly recommend you to try the silverblue-main-surface-image from universal-blue.org.

Why?

• Because you need the linux-surface-kernel for it to work properly. Otherwise, most functions, like touchscreen, webcam, adaptive brightness, auto-rotate and more won't work at all.
• You can install the kernel on other distros too, but it might break. I had that already happening. On uBlue, it's baked in and won't break. And if it does, you can just roll back.
• It comes with Gnome by default and provides you a great touchscreen experience
• And you can install Waydroid easily, which gives you access to Android apps. Distrobox is already pre-installed and gives you access to the software of every distro available, including Arch.

I don't recommend using another DE than Gnome for that. Especially those "light weight" ones like XFCE are horrible for touchscreens, and if you use a browser, those few hundred MBs RAM less used by them is negotiable.

Gnome is, like it or not, king for devices like that. The gestures on touchscreen, big icons, and more, is only surpassed by Android.