We can also use Azure Table or Blob Storage and I was thinking of just creating a separate activity entity for every user of a workspace so that then I can just easily filter activities by user's id
Azure Storage Table could be a choice for storing your activity entities, and Table storage is relatively inexpensive, you can consider storing the same entity multiple times (with different partitioning strategy) in separate partitions or in separate tables for reading efficient.
And storing user’s activity entity with workspaceid_userid as a compound key can be also a possible approach. For more and detailed Table design patterns, please refer to this article.
Azure only supports 100 entities in a single batch operation (correct me if I'm wrong)
Yes, a single batch operation can include up to 100 entities.