It also offers budget caps, but indeed, those are more a warning and not a hard shutdown. That's annoying. Same at microsoft by the way, except indeed that developer credit as a failsafe.
Google gives 100k free credits to universities and startups by the way (and even to individual departmens if you are a big university). You just have to apply and let them bring in trainers and you have to actually use a percentage, otherwise they take it away the next year.
For Cloud to make economic sense, you need to treat it very differently from traditional infrastructure. For example, simply shutting down our Dev environment outside of business hours saves means we're not paying for the compute the majority of the time.
First analogy I thought of were stories about drug dealers giving away free samples to schoolchildren to hook them up before asking for money.
Nobody is under any illusion that Microsoft just really likes universities for some reason. But on the other hand, we did need lots of this stuff and it's very cheap, budgets are tight and it's not as though hand-rolling even more stuff would be cheaper - we do hand roll some things where it makes sense.
For example, periodically senior people say "Why do we spend $$$$ on a supercomputer? Surely we could rent one from the cloud?" and we (well, not me, different group same department) go OK, we will cost that for you. And they get Azure, Google, etc. to quote them for what they need a supercomputer to do, and then they present this, "The Cloud providers can do that for $$$$$". Ah, that's more money. No thanks, we will continue to run our own supercomputer.
It's not even close. Cloud supercomputer is great if you need the supercomputer for six weeks to do a special project and then you're done with it, the Cloud provider saves you a lot of money. But the University needs supercomputers all the time, so the numbers do not work.
It sounds to me some legacy Windows 2000 spaghettini fettuccini is powering some parts of azure.
Azure just like other cloud services (I've used AWS but as I understand it GCP is the same) doesn't believe in timely billing. You can and will receive charges against an account for services that were turned off yesterday, the day before, even last week, as gradually billing catches up to reality. This means that there is no way to actually cap a budget. If you decide "Once this costs $100 I'm turning it off" you are not capping your expense at $100, after you turn it off charges keep arriving, I've seen a week later and I wouldn't be surprised if it can be longer. Should they do that? Well, even if they shouldn't, good luck making them stop.
But with the "free" Azure credits that have no money behind them, when it drops dead Microsoft eats all the residual charges that will be discovered days or weeks later, because there is no other party for them to bill.
I work for a University, I suspect that if you paid full price for these services it makes no economic sense, a $100 Azure credit that cost $100 is a bad deal, but the University gets an enormous discount, for obvious reasons, and if the other cloud vendors don't want to offer actual billing it does feel like they deserve the consequences.