What happens if I create a dynamic membership group without enough P1 licenses?

[nozhatwork]

What happens, for example, if I have 100 users but only 10 P1 licenses, and I create an all users dynamic membership group?

Will the group be empty, will it contain 10 arbitrary users, or will AAD automatically expand the number of licenses and charge for them?

[#2 · Accepted solution]

Microsoft doesn't enforce licensing requirements in code, thus many of the features that "require" a specific license will work just fine even without one. In your scenario, the group be created with all members.

Also, there's no way Microsoft will ever auto-purchase/charge you for any additional licenses, that will create all sorts of problems for them. It is your responsibility as the admin/owner to make sure you comply with the license requirements.