The message is simply a shortened way of expressing that The disk formatting is complete or The formatting process has completed.
It isn't a sentence, it's a status indication; think of it as reading a meter or indicator. A human would not report to another human Fuel empty, but surely you don't expect your car's fuel gauge to display Your fuel tank is now only half full, either.
One of the criticisms Windows has attracted across the years is inconsistency in its interface; in some places, it attempts to be "user-friendly" with conversational text and guides, and in other places it keeps to terse technical language. This very moment as I am writing this, I have seen it: the wordily observed You just plugged a device into the audio jack, followed immediately by the perfunctory Device muted. I can't fault you for wondering why they don't stick to one or the other.