What is the need to take a backup of the Office 365 account? Microsoft is quite famous and provides multiple unique features then why take a backup of Office 365 to PST?

Why take a backup of Office 365?

Because Microsoft does not back up your Office 365 data.

What if you need to restore an email that was deleted 40 days ago? What if you need to restore a file that was deleted last year? What if you need to restore a Teams chat that was deleted 6 months ago? What if you deleted a user 2 months ago but forgot to export their data?

https://learn.microsoft.com/en-us/compliance/assurance/assurance-data-retention-deletion-and-destruction-overview

You may have heard about cases where persons or companies get in big trouble because the police (or litigants in a lawsuit) found emails and other business records going back many years. Steve Bannon, Volkswagen, etc. And once they know the lawsuit or action is coming, they are not allowed to delete them. It's also a bad look to delete selectively even if that is innocent (Hillary Clinton). What can they do?

They can have a "data retention policy" which deletes everything (except certain chosen or mandatory things) after a reasonable time. This is not "hiding evidence" because they aren't doing it in response to any legal threat; their motivation is simply to keep tidy records.

These efforts would be ruined if cloud providers like Microsoft 365 kept data forever. The litigant would simply subpoena the data from Microsoft, Google, AWS, etc. so companies need their cloud providers to have a deletion policy at least as aggressive as theirs.

That's why Microsoft doesn't archive things forever, and transfers responsibility on the customer to preserve data they might want to preserve.

don't mistake redundancy for backups

Redundancy and replication are used to ensure the continuity of the service the provider offers, to ensure that data won't get lost when hardware and/or similar failures happen. They provide protection against unintentional/accidental data loss.

Such redundancy isn't designed to aid in data recovery: it isn't designed to forever retain & protect and won't allow you to recover data that gets actively or implicitly deleted.

deleted data will be deleted permanently

And possibly much sooner that you expect.

joeqwerty already answered with the relevant resource Data retention, deletion, and destruction in Microsoft 365 but to summarise:

• when a user deletes their own data, that data will become fully unrecoverable after 30 days (or less)
• when you stop paying for a subscription, that associated data may linger around for some time but it will still get deleted within 180 days (or sooner)

Do you need (external) backups?

That depends on your business requirements, possibly legal/compliance requirements and your own risk assessments.

But most likely: yes.

A backup will allow you to recover deleted data from your current users and from deleted users/accounts for as long as you keep your backups.

When you say, "Microsoft is quite famous and provides multiple unique features", it's not entirely clear what that has to do with the question of reasons to make backups.

But the phrase gives me the sense that you may be thinking of reliability. Perhaps you think that Microsoft is unlikely to lose the data.

But redundancy is not the same as backup. As other answers have stated, you could delete something, then want to recover it later. Reliable storage will not help you; Microsoft duly deleted the file when you told it to.

This concept is often invoked by the phrase, "RAID is not a backup": Why is RAID not a backup?

Sorry to pile-on the list of reasons why, but a big non-technical problem that often goes overlooked...

What if you don't pay your bill and lose everything?

...even if accidentally.

I've seen a couple scenarios happen to companies, and it can be a real mess:

• Credit card expires, billing/renewal nag messages end up in spam, account cancelled.
• Employee set up account under their name/e-mail/purchasing card number, a couple years ago back when few used it. Now the whole company uses the service. Employee leaves, renewals lapse, whamo, now people are scrambling to find a reliable contact at said SaaS provider who can even do something about it.
• SaaS provider gets bought, then bought, then bought again, and through all the data merging has no record of your account or plan. Cancelled. Data gone. Contacts don't work there anymore. Takes weeks to recover from. (Granted, this one is of no concern with Microsoft, but I bet you can think of similar scenarios.)