And Canonical decided to take that data, search him on Linkedin and contact him. Seems reasonable to see that as a reason to loose respect for Canonical over.

Don't get me wrong, what Canonical has done here also isn't good. But what they've done shouldn't have been possible because Microsoft shouldn't have given Canonical the information in the first place.

The question I have is what's in it for Microsoft, why did they even bother to do this in the first place? I can't believe there would be that big of a cash incentive.

If this were Windows, I would expect Microsoft to pass it to an internal department that sells higher service contracts and then off to 3rd parties that provide the same for up to a week after you find the "don't share my data" checkbox.

That (enterprise support) is a very important side business. Whether they got cash from other OSes or just set it up the same to fight an eventual Anti-Trust Case is anyone's guess.

Again, the user's relationship was with Microsoft, not Canonical. Microsoft is the one who the user entrusted to protect their data, and they didn't.

The user chose Microsoft's Azure product to run Canonical's Ubuntu product. The user has relationships with both vendors.

how makes that Canonicals side of things better?

It doesn't.