I received the same email last week. It appears to be legitimate. Once you hit the five years you can apply for an upgrade to settled from pre-settled status. They're supposedly also making that automatic based on their checking of the pertinent records. As they are still allowing formal application for that change, if I was still pursuing this I'd apply formally and not trust for them to implement an "automatic" status change.
Just color me paranoid.
(We sent in a notice when we left the country that we were leaving and not intending to return, but we still do continue to get EU Settlement emails.)
It is legitimate and has been discussed on forums.
Although a UK visa has to be renewed in time to avoid being unlawfully in the UK, it appears the EU felt that those using their Free Movement are low skilled and might not remember to apply before their Pre-Settled Status expired. The extra two years on Pre-Settled Status is given to avoid them being unlawfully in the UK, but they still might not be allowed to have EUSettled Status if they have broken their stay by being outside the UK for more than 6 months (in any 12?). It seems these can use that extra 2 years in the UK to try to find a UK visa they might qualify for.
In addition to this, those who applied for EUSettled Status just had to self certify that they had not broken their 5 years, but nothing was checked at that stage. Now, the UK will check the records to see if they really do qualify after 5 continuous years in the UK on EU Pre-Settled Status and automatically give EU Settled Status to those who meet the requirements.
Meaning those who don't meet the requirements for EUSettled Status (a type of ILR) get the extra 2 years of EU Pre-Settled Status automatically, to look for a UK visa to stay before that 2 years expires. For a few, that extra 2 years might then allow some to meet the requirements for EU Settled Status.
E.g. some EEA citizens left their non-EEA families in the UK while they were outside the UK and that 2 years will give them time to find a work sponsor for a UK visa so that their spouse and children can remain too on dependent visas.
EDIT. This was the announcement in July
https://www.gov.uk/government/news/eu-settlement-scheme-enhancements-confirmed