A tsar Michael would be an interesting situation. From what I have read of him, he was an intriguing mix of honesty, disdain for much of Russias elites (especially Petrograd ones) and suprising amount of pragmatism and situational awareness for late Romanovs.I don't entirely agree with the assesment of the British ambassador that he would make a great liberal, British style monarch, though I would expect him to take a realistic view, giving some power to legislature, while still enjoying a possition stronger then even that of the German kaiser. He is less likely to have the publicity problems of Nicholas II. (no Rasputin), for though his romantical affairs might be problematic, its a much more acceptable thing then the idea that the tsar is influenced by a Siberian mystic, who might be sleeping with the tsarina.
Considering the circumstances of Nicholas's death, a Russo-Japanes war of some style is likely, and even if Michael makes some efforts for army reforms, still likely ends in a rather humiliating end. However, Michael will likely have much more situational awareness, so events likje the bloody Sunday are much less likely to occur. This could lead to either no, or much weaker 1905 revolution. At the same time, Michael would have an excellent reason to do away with many members of the Russian elite (that he disliked), from possitions of power in the army and navy, and would likely try hard for reforms in those fields, while also likely to be rather averse to future millitary conflicts. He might decide to still form the Duma, and will likely allow it more authority then his brother, though it would likely stop long way before British-style monarchy.