Where would those employees go? Almost all rival big tech companies are implementing the same thing. They also have a nearly complete hiring freeze unless it's for a super critical role (very rare) or extremely high skilled AI work (few tech workers can do).
These employees are going to complain, but unless they have their FU money already, they are 100% going to RTO. What else can they do within reason?
The "deal" at Microsoft is that you get paid 30-50% less than other big tech employers but it's a lot chiller (imo this is true from my experience at both msft and faangs, I hear it's worse recently though). A LOT of people are there for the lower work pressure and no RTO. If they get rid of that, there's no reason not to jump to Google where you'll get paid substantially more except for needing to grind leetcode. Or even go to Meta/Amazon if you're willing to grind for even bigger bags of cash.
I understand that, my point is that Meta/Amazon/Google have massively pulled back on hiring as well. I personally went from being contacted several times per year by Meta to being 100% ghosted mid-conversation last time. They fired all the recruiters.