Azure SQL Server outdated version - how can I upgrade it to current version?
Azure SQL Database is automatically updated, but it uses a different version numbering scheme from “box” SQL Server.  It went from “11” to “12” several years ago during a major breaking change, and will stay on “12” indefinitely.
It always has the latest features and fixes for the SQL Server engine and is ahead of SQL Server 2019.  By the time a new version of SQL Server is released, the code has been running in production in Azure SQL Database for a long time.
You control the database compatibility level of your databases to opt-in to breaking changes and query optimizer upgrades.  The database compatibility levels map to the major releases of SQL Server.  Over time the default compatibility level for new Azure SQL Databases increases up as new compatibility levels are introduced.