The only real Microsoft/Arcade overlap right now would be the Microsoft-branded (but not currently developed internally) Game Room.
Honestly, with Krome having dropped the ball so badly, I think it'd require someone of Aaron's caliber to get it even REMOTELY back on track at this point-- and Microsoft would have to have decided to bring it internal, which seems very unlikely.
Nevertheless, I'm pretty sure this isn't the reason, and I hope that whatever reason it may be, that he's planning on continuing work on MAME as his personal time allows.
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Try checking the MAME manual at http://docs.mamedev.org
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