They can either add a new API which almost nobody would use ― because everyone already learned to use the existing one and either reused or reimplemented the MSVCRT's logic so that most of the software parse the command lines the same way; or they can literally break every single program in existence by breaking the interface of CreateProcess ― which is just as likely as Linux breaking the interface of execve(2).
Giving CreateProcess a new flag so it would to correctly accept "path\\to\\my\\program.exe\0arg_1\0second argument\0argument with literal \" symbol" (with an implicit \0 terminating it) as lpszCmdLine is an easy part; the hard part would be forcing everyone to switch to using it.
Also, I'm pretty certain this processing happens in the user space, and Win32 API is already bloated beyond any belief.
They aren't going to break existing API or bloat the kernel with a bunch of functions that do the same thing.