So I am participating in a Hackathon hosted by Microsoft. And I had to waive my IP rights for whatever submission I make. Is this something I should worry about ?

The "do I give a shit about my IP rights" heuristic:

1. Do you intend to employ code you've previously written?
2. Is your code worth anything? (Patented/able, novel, unique)

If yes to either of those things, pass. Unless you just like giving things to Nadella.