Not sure where you got that but it is not true. MS employees are free to make non competing open source projects in their own time on their own hardware.
Very much a token reward, but I was surprised to learn when I first got notified about having a vote that: A) Microsoft actively tracks my outside activity on GitHub[1], and B) that they encourage it.
[1]: This would have been creepy if I hadn't agreed to it by linking my GitHub account to my corporate identity. I make a lot of contributions to official MS open source projects and didn't want to make a separate work account.