Meanwhile for decades I remember many software EULAs saying things vaguely equivalent to "don't use this software in Cuba", etc. That is what I would compare this to.
I put it in quotation marks because it is my laymen's understanding of what the sanctions are intended to cover. I could be wrong and the actual boundaries could be subject to debate and disagreement.
I think they've realized that the argument that they are a commercial publisher is quite strong. Thus they are not eager to challenge it and wind up heavily fined for sactions-busting. Especially since Microsoft is a significant supplier to US government entities.
We should be putting our collection of code in something else with a mission around those ideals.
Github, Facebook, Twitter, Youtube, Sourceforge, HN, Slashdot... These free services are not public. You might treat them as such, but you are foolish believing they are.
If you cannot see the difference, I suggest to read the excellent Wikipedia article. [1]