Azure SQL - dataspace used vs max dataspace
First of all, no need to worry as this is normal behaviour.

The link in your answer From msdocs on Data space allocated gives us the info needed:


  The amount of space allocated grows automatically, but never decreases
  after deletes. This behavior ensures that future inserts are faster
  since space does not need to be reformatted.


This space allocated grows automatically and will stay the same way when it grows out. 

If the database keeps on growing, eventually the allocated space will be the same size as the maximum storage size. This is comparable to the autogrowth behaviour of regular sql server databases.

A useful part of the azure portal is that there are these little (i) marks on many settings.



These should point you in the right direction, the learn more points us to above linked page.



In short


  when used space is nearing the allocated space, some more space is
  allocated


yes (as long as you are not at the database limit)


  when used space is at max size we have no more space available thus we
  run out of space


and yes

Another way to get the size is checking the space available in the properties of the azure sql db with ssms.



This could mean that even sql server itself does not know that a mechanism like allocated space is used. 



Proof

growing out the previously mentioned database a bit:



increases the used space &amp; allocated space:



Afterwards I deleted the data &amp; shrinked the database (Which you shouldn't ;)), also not with dbcc shrinkdatabase, double foul there.

dbcc shrinkdatabase([databasename])


Results in the same allocated space, but less used space: