Just like how the mob indemnifies local businesses from unwanted fires by giving them free access to protection for defensive purposes. This should _reduce_ arson, which is a _good_ thing.
If it does turn out that Microsoft is only doing this so that they can go and sue people who are using AWS or GCP then I'll change my tune. Until then I'll give them the benefit of the doubt.
Furthermore, if Google/Amazon _did_ follow suit it would be mutually assured destruction for Microsoft to sue AWS / GCP users.