What is significant about Michael’s last observation of Frances?

To understand the ending's significance, it is important to note the results of their exchange. Throughout their conversation, Frances repeatedly expresses that she is bothered by Michael's wandering eye. Michael gradually admits to this behavior. Perhaps he is also admitting the full truth to himself as he admits it to Frances. As Frances questions Michael, she becomes more upset with his answers. She presses him to reveal more and her worst fears are realized. Michael's stance remains the same and so does his demeanor.
While at odds, both characters are coming to terms with the truth. However, knowing the truth does not change their circumstance. From start to finish, they remain unable to put themselves in each other's shoes. This makes the visual of regularly walking together down Fifth Avenue even more appropriate.
The lack of resolve is integral to the story and magnified through Michael's final observation. By the end of their exchange, what hurts Frances is the idea of Michael wanting other women in a way that detracts from his love for her. When she gets up to make a call, Michael looks at her the same way he looks at the other women, noting her physical attributes.

She got up from the table and walked across the room toward the telephone. Michael watched her walk, thinking, what a pretty girl, what nice legs.

For Frances, his wandering eye is a personal offense. For Michael, it has never been about anything personal. In fact, it is the opposite. This ending, while unresolved, implies that Michael sees all women through the same lens, including Frances—that is, on a completely surface level. For better or worse, they remain unable to see eye to eye.