@AzureUser-9588 Thank you for posting your question on Microsoft Q&A.
"With SQL Managed Instance supporting Azure AD server principals, you can create user accounts to authenticate to the SQL Managed Instance without requiring database users to be created as a contained database user."
Service principals is also supported in Azure SQL. This does not remove the requirement to create contained users. That is still needed.
This only allow applications to create new user AAD users in the contained database which was not possible before in Azure SQL DB.
Regards,
Oury