Update (01/06/2022 @ 06:01 ET): Jason Ronald, partner director of product management at Xbox, has said that this was done in error. The company is working on identifying and re-enabling accounts as soon as possible and has invited users to email the address given in the email to have their accounts reinstated quicker. The article as published on January 5th, 2022, is below.
The Xbox Series S and the Xbox Series X could emulate the likes of Wii, GameCube, Nintendo DS, and PlayStation 1 pretty easily, thanks to a policy undertaken by Microsoft. The company pledged that any of its Series S and Series X devices could become full-fledged developer kits, and all you needed to do was pay a $20 fee to Microsoft to get a developer account. Developers could then load and test their own code on the consoles, which opened the door to normal users installing emulators on their consoles, masquerading as developers. However, Microsoft has now begun disabling developer accounts that were used exclusively for emulation, saying that those accounts have been disabled for not having "an active presence in the Store".
To be clear, Microsoft has always been allowed to do this as per the release clause in its developer code of conduct. It was no secret that developer accounts essentially being abused in this way was likely a gray area at best, and it's not too surprising that the company wanted to take action. Having said that, users were not warned ahead of time that their accounts were going to be disabled, catching many off guard, and some feel that they are entitled to a refund.
If you're a legitimate developer working on a title that was to be released on the Xbox Store that has had your account disabled, it's not clear what your next step should be. Presumably, you would need to contact Microsoft through the given email address and plead your case as to why you need a developer account.
Thankfully, Developer Mode isn't the only way to access emulators anymore, and there are other ways to access them. You can run lots of different emulators in retail mode now too, including RetroArch and DuckStation. No whitelisting is required, either. While it's unfortunate that users who paid the $20 fee exclusively just to access emulation will likely have their account access revoked, at least there are now alternatives meaning that the door to emulation isn't completely shut.
If you created a developer mode account recently exclusively for use in emulation, it's likely that Microsoft will let you keep your account for a little while longer until it becomes clear you don't intend on publishing anything on the Xbox Store.
Update 1: Microsoft's disabling of accounts was accidental
Keep an eye on your email, as it appears that Microsoft disabled accounts in error. Jason Ronald described it as "regularly scheduled maintenance" that accidentally disabled accounts that it shouldn't have.