Koreans use it when they see someone upset or notice something unusual.
Yes. "무슨 일이에요? (museun irieyo?)" is polite and caring. You can also say "무슨 일?" casually with friends.
You can say "What happened? Are you okay?" — 무슨 일이에요? 괜찮아요? (museun irieyo? gwaenchanayo?).
무슨 일이에요? means "What happened? / What's the matter?" Caring expression. 무슨 (museun) = what kind of, 일 (il) = matter/affair, 이에요? (ieyo?) = is it? Polite question. Used when someone looks upset or something unusual happens.
1. Friend looks sad: Show concern.
2. Something unusual: Ask what's wrong.
3. Empathy: Build closer relationship.
What happened? Are you okay?
What happened? Do you need help? (Formal)
What happened? Tell me. (Casual)
It's nothing. (Reply)
• 왜 그래요? (wae geuraeyo?) - What's wrong?
• 괜찮아요? (gwaenchanayo?) - Are you okay?
• 무슨 일이야? (museun iriya?) - What happened? (Casual)