Netflix also has use-cases where it's much more difficult to sign up. For example, someone who watches Netflix on a game console (Xbox, Switch, etc) might only occasionally watch it, and also have a much longer sign-up process (not only the flow, but also dealing with console keyboard, not having a password manager, etc). Ditto for people who use other hardware like Chromecasts and such and may not have a dedicated "computer" where it's quick to just sign up from when they find they've been downgraded.

I also run a business designed to be used in the moment when an author is struck with inspiration. It takes less than a minute to upgrade or downgrade (and some users choose to only upgrade for hours at a time each month with no penalty, aka a month of subscription time sometimes lasts a full year), but when I experimented with automatic downgrades to those who hadn't signed in all month I got complaints that they "weren't able to just log in and use the service they paid for".

Could just be a notice thing (improving messaging to more reliably let users know they've been downgraded), an option (letting users opt-in/out of automatic downgrading), or have other solutions (maybe refunding instead of downgrading?), but it does seem that at least some users like to feel like they're paying for something to be "at their fingertips" when they need it.