The Azure VMSS (Virtual Machine Scale Set) Moodle deployment in combination with automated site backups has to be used with caution. The object storage filesystem instructs the administrator to create SAS keys with only read and write permissions, and it looks like this would cause the moodle scripts which try to do deletes to fail. So, in our case, when automatic site backups were enabled, blob storage usage began to balloon.
Also, occasionally, the backup would cause some issue due to which the object storage filesystem would stop writing to blob storage and would instead fill up the local hard disk, causing moodle to complain "session partition full". One quick check and the first place to delete would be the temp directory, especially if backup is turned on.
Even after running some scripts (a bash script is mentioned in this forum thread) and deleting all the unnecessary backups and orphaned files, blob capacity did not come down, only container size came down. So, my brute-force solution was to avoid blob storage and use local hard disk storage instead.