10 billion was potential investment. They transfer that in tranches, so lot of it is still in MS bank. They already have access to GPT3/4/turbo + Dalle 2/3. Plus with its hordes of lawyers, it will be an uphill battle for OpenAI to make MS lose.
Sure, they can but that would be against all the safe alignment values they are pushing. They'll lose billions in current and potential investment and will spend the life in lawsuits. Also, govt may not like giving away cutting age tech to China.