They were DMCAed, they got bad press out of it, they eventually stood up for the developer in exchange for a token concession (deleting test data that referred to copyrighted music and was named in the complaint): https://github.blog/2020-11-16-standing-up-for-developers-yo... , and reversed the takedown unilaterally (which would mean the claimant could take github/microsoft to court if they felt like it).
Whether it's a matter of principles or just the bad press from the initial takedown is less clear, but I think it'll be a while before they re litigate this issue.