Canceling to downgrade your 365 subscription is the “normal” Microsoft way, so that part is not a new scummy practice that was invented for this scummy occasion. I do hope this forced upsell comes back to bite Microsoft in the ass, most consumers won’t be aware of the downgrade option, but consumer agencies shouldn’t let this slide, it’s setting a very bad precedent.

The ms instructions:

1. Go to Services & subscriptions and if prompted, sign in with the Microsoft account associated with your subscription.
2. Find your current subscription and select Manage > Cancel subscription.
3. The Cancel page will show you the features of your current subscription plan. If you’re switching to another plan with less features, select the plan that works for you.
4. Follow the instructions to complete the switch. Your existing subscription might not change immediately, but it will automatically change to the new plan when the plan renews. You won’t be charged for the new plan until it renews into that plan.
   https://support.microsoft.com/en-us/office/switch-between-microsoft-365-subscriptions-3fcc1efc-2722-427f-8efa-db94b9b0a36b