You can change the size of the SQL PaaS instance and scale down, however the constraint will be the disk utilisation and if it will fit into the smaller instance configuration. You should also be aware that you will take a hit in performance with a smaller instance plus a small potential for an outage as the instance resizes.
The approach should work also with managed instances per:
https://learn.microsoft.com/en-us/azure/azure-sql/database/scale-resources
The SQL platform on Azure is fairly resilient and you can set some zone redundancy, but not all features are there with managed SQL currently
https://learn.microsoft.com/en-us/azure/azure-sql/database/high-availability-sla