For the latter issue you mentioned as well, it may be caused by fear of outages. The people implementing the design may have opted for a soft notification to the right people when the key expired but wasn't renewed instead of refusing to validate tokens and causing a global outage affecting every cloud service for every customer.
Hindsight is always 20/20, but why didn't any government, organization or institution require a 3rd party audit of MS prior to this? And how special is MS in it's design compared to gcp or aws? What is MS's response to the findings?
I have a pet-peeve for people that show up into an organization and find everything is done wrong without getting into the nuances and root causes so they can capitalize on the supposed failures for fame and glory. I don't know if that is the case here and certainly MS 's security track record and MSRC's response record is horrible but I am taking this report with a grain of salt.
The government does need to twist MS's arm a lot in my opinion. I've done an objective comparison of cloud provider security capabilities and Azure's is the worst by a large margin, too much nickle and diming to charge customers more for security.