do microsoft turn a blind eye to bullying

Sorry to hear that, man. Some people just have to live their lives in such a sad way. I hope things turn out better for you!

They take bullying / harassment seriously.

I would not only recommend reporting the user(s) to the Forza Motorsport team, but also reporting and blocking them on Xbox Live itself.

https://support.xbox.com/xbox-one/xbox-live/file-a-complaint

When it comes to Xbox Enforcement, they don't always respond to those that reported another user. If they find the user has broken the Code of Conduct, then they will just issue that person a suspension.

https://enforcement.xbox.com/en-US/home/howto#sub-topic0-0

https://www.xbox.com/en-US/legal/community-standards

https://blogs.microsoft.com/blog/2019/05/20/video-games-a-unifying-force-for-the-world/

Repeated violations can result in a permanent suspension. But this person has more than one account so whats to stop them from making more. If xbox can't do anything then the only thing I can suggest is try to ignore them and maybe they will move
on. Hope this ends soon so you can go back to enjoying forza with your friends.

All you can really do is report and block them (and keep them blocked). If you are the admin of your club, then you could also ban them too.

https://support.xbox.com/en-US/xbox-one/xbox-live/what-are-club-owners-and-admins

If you keep them blocked, then you won't receive messages, party, or game invites from them. They also won't be able to see your online activity, and it removes them from your friends list.

https://support.xbox.com/en-US/xbox-one/xbox-live/block-or-mute-other-player

Like I already mentioned, in my experience, Xbox Enforcement rarely updates people to tell them the other user was dealt with.

"Q: I file lots of complaints, why don’t I see more of these messages?

A: Complaints are not always accurate, and while some complaints may seem obvious, we have to evaluate them contextually against the specifics of the Terms of Use and Code of Conduct. Sometimes the observed activity does not raise to the level of a genuine
enforceable violation. In some circumstances, (due to business, legal and privacy concerns) we can’t always send feedback to users on complaints they have filed."

https://www.xbox.com/en-US/live/complaint-feedback

I can recall one time when they thanked me for reporting someone.

Again, they look into the report, and if they see that the person broke the Code of Conduct, then they would get a suspension.

i've blocked both gamertags that the person uses, supplied fm.net with video clips starting from 7:04pm-4:20am, got a small and very strictly clean club and we've got up into 600th, i've made reports from my xbox, had to report him tonight as he asked
a lady i was gaming with a very sexually suggestive question, but as i had him blocked i had to unblock him to see the said remarks and then blocked him, mixer removed comments, but ive had no reply in 10 days now as it was around 5am i made the initial full
report and I feel the service i'm paying for isnt living upto the expectation levels, i mean ive left my club in order for them guys to have a break from it, a few corner bombs are expected but not for this lengh of time, i mostly sit in rivals now (best lap
times, single player). I've done everything i feel in my power, im a 38 yr old guy who just wants an escape living every day with p.t.s.d and it just isnt happening im afraid.