You can all throw your dreams about Meltemi, MeeGo etc phone from Nokia happening. There's not a single large investor who would want Nokia to throw money at that again and Nokia lives for its investors, like any other company.

Android in a other hand is a great fit. Android is the Windows of today and with all the connected stuff Nokia is planning on cars and likely expanding it to other devices (wearable, accessories?) in a form of Internet of Things, it's a possibility they would expand that line to Android phones. Who knows. Nokia should not care at this point anymore what OS its devices are running on or support.

Also about those pictures, they are from evleaks. I don't know a single picture or rumor from evleaks that didn't end up being true. Evleaks on his last tweet for the first time finally himself said the device is running Android.

I don't doubt the device exists at all. What I'm not sure is what's the idea behind it. Is it Nokia Research project, and so Nokia's own project or it it made by the device unit left to MS? Will it actually get released? It's not totally impossible idea that on the very low end MS could sell forked version of Android, that's UI seems to even have some WP elements, outside the standby screen resembling Swipe UI.
MS after all bought the sharply declining feature phone business. I'm sure MS wants to make money out of it and that likely wont happen with the S40 Asha phones. Though I'm not sure how that would affect MS's Android patent trolling.