Some of these responses were pretty funny. People should do a little research before popping off like a lunatic. This is a legitimate email and Microsoft isn't trying to scam you. Though I do agree my first impression was a phishing attempt by a bad actor. MS should rework the tone of the email.
If anyone gets this email from Microsoft, it is because they were an administrator of an Azure account, most likely from an old corporate account. Azure is their cloud-based account management tool.
You can check your account by going to https://portal.azure.com/ and logging in with the Microsoft account associated with the email to which you received the notice. Or if you don't trust any links, just search for Microsoft Azure and follow the link to log in. Once I logged in, I could see that my MS account was tied to my old company's unused Azure account. You can clearly see the tenant ID when you hover over your name in the top right corner.
Within the Azure dashboard you can see an option to manage your Microsoft Entra ID. Entra has something to do with authenticating users. In my case, I was an administrator of some software from my previous company. There was only one user - me. I left there two years ago. The company also folded for good over a year ago. Apparently, the subscription must have lapsed.
In my case, I am doing nothing as my previous company doesn't exist any longer and I have nothing to do with the Azure account tied to my Microsoft account.
Hopefully you will be able to trace your own issues without having to sit on a call with Microsoft support.