They are dropping x86 support, as oposed to 386 support. That means 32-bit versions will no longer be actively developed / supported going forward.
That means no Linux for 32-bit Atom chips or older hardware. As most Intel processors today are 64-bit, there is less and less need to support 32-bit, although that means that 32-bit processors will be restricted to older distributions with LTS support.
As for Windows, it doesn't say that it can't / won't run on older versions, just that if there are problems, you are on your own and will have to solve any compatibility or stability problems yourself.
The biggest problem here is that the "support" for new processors means adding new features and drivers to Windows 7 and 8.x. Windows 7 is in extended support, which means that it only gets security updates. As new features are not security, there are no resources available to implement them.
If you are a large corporate, buying thousands of PCs with Kaby Lake, then you can probably pay for MS to write the relevant drivers, as a private individual that isn't realistic.