Is there a grace period for Microsoft 365 license changes?

Yes, within the first 7 days, licenses are fully flexible.

After the 7-day grace period expires, you can still increase seat counts or upgrade SKUs with no penalty, although you will be charged at the same rates for any extra seats, and will be subject to the pricing of the upgraded product(s).

However, after the 7-day grace period expires, you will not be able to downgrade, reduce seat count or cancel subscriptions without incurring an Early Termination Fee (EFT), which will be calculated as 100% of the remaining contract value.