"Or does the idea of a single OS disintegrate into a fractal cloud of zero-cost VM's?"

I would say zero-cost computing. Whether that occurs at VMs or even on what we would recognize as a computer seems too limiting. I think all that matters is that the program be elaborated. (There, I used a term from the Algol 68 report!)

"Would we still recognize it as a Unix?"

Not sure what "it" refers to, but I'm sure that any and all things UNIX-like would be programs that could be run.

I imagine that clever marketeers will design a box that can appear to run programs (they may or may not actually run on anything contained in the box) and then call it a "computer", for those who still care. It could have flashing lights, even. And, as it is nearly empty, it could range in size from a watch (or smaller) to a big desktop box.

In today's terminology, what I see is that programs will run in the cloud. Programs I think are of eternal importance. How they are executed will become irrelevant.

Somewhere in that cloud are actual computers, of course. How they work I'm sure will change drastically, as it has fairly often, from the beginning.

--Marc