Inactive users and User licence usage

You won't be billed beyond the available licences, you're just billed for the licences you have. That said, you may not be using all of your licences if you have deactivated some users and not added new users.

To reduce your licence count your administrator must file a case with support, using "Licence Reduction" as the subject line as shown in this knowledge article.

So yes you do have to manually reduce licences by filing a case. As for features I'd expect those to work in the exact same way.