Game Pass allows smaller developers to get a boost, but generally only after they've had some form of critical reception, whether that's through game site reviews or through user reviews. In this respect, Steam is a hugely valuable asset to Microsoft as Microsoft can directly see user reception to a game. And not only that, but because Steam displays user reviews over time combined with an easy to maintain (for the developer) way to post update notes for their customers, Microsoft can also see how well a developer supports their product over a long period of time post launch.
While that doesn't help a smaller unknown developer get onto Game Pass day and date, it does make it possible for them to get onto it at a later date...if their game is well received and well supported.
Regards,
SB