When an Azure user is deprovisioned from the Active Roles Console, Web Interface, or Management Shell, the Office 365 licenses that were assigned to the user during user provisioning are retained based on the Office 365 Licenses Retention policy configuration. As per the policy set, all the licenses or only selected licenses are retained upon the user deprovision.
Active Roles Console enables you to create a new Deprovisioning Policy Object or Add to the existing Built-in Policy – User Default Deprovisioning policy. For instructions on how to create a Deprovisioning policy object, see the section Creating a Policy Object, in the Active Roles Administration Guide. The Office 365 Licenses Retention policy from the User Deprovisioning Policies must be selected to enable retention of the required Office 365 licenses upon Azure AD user deprovisioning.
|NOTE: The Office 365 Licenses Retention policy is enabled only when Azure AD is configured.