If true, this is a new requirement, though not surprising. I had to do a fresh install of Windows 10 in 2018 after one of their "updates" disable Office 2007 Pro by stubbing in Office 360. There was no way to undo it, and no way to access all my office documents, most importantly an Access 2007 DB I have to maintain for a long-time client. (I learned several other users of older Office solutions were also impacted by the attempt to block access to Office documents if not using the subscription based Office 360.) So a clean install of Windows seemed to be the only way to go since neither MS or MS certified support techs knew how to undo the update so Office 2007 would run again.
I used MediaCreator to make an install DVD for the version of Windows 10 that was current at the time. I then powered down the machine, my router and cable modem so there would be no connection to the internet. I installed using the option for a local account an NO MS account. After completing the fresh install (which included reformatting and partitioning the SYS drive) I installed Office 2007 and all its updates I had saved over the years, as well as a few other key apps from saved install files before shutting down, re-powering the modem and router. After three weeks of rebuilding the system with fresh installs of all the 3rd party applications - some requiring lengthy exchanges with vendors for activation issues - I was back running and the only account on the machine was my local account.
Then in Oct 2020 every time I cold-booted I got notification that there was "... a problem with your Microsoft account" as in incorrect password or login ID!?!? ****!?!? Yes, I do have an MS account, but this machine had no knowledge of it and I had NOT used this machine to log into it after the clean install - I was afraid if I did, they would disable Office 2007 again.
So how did MS know that I, as user of this "clean" machine had an MS account IF THEY DID NOT RIFFLE THROUGH MY PERSONAL INFORMATION ON THIS MACHINE IN VIOLATION OF PRIVACY POLICY/LAWS IN ORDER TO FIND OUT IT WAS BEING USED BY A PERSON WITH THE SAME EMAIL ADDRESS AS AN MS ACCOUNT HOLDER?!?! BTW, I don't use Outlook (not installed with Office 2007 apps) or any other MS email client / app. I don't use MS browser for any web activity (until MS forced Edge on us and installed it as the MS Search agent when you use the search bar or WinKey+S feature).
If in fact there was no option other than using an MS account to clean-install the OS with current versions of Windows, then rest assured, the monthly subscription fees and connection to Internet and MS account for cold-boot validation before use will be coming soon. The legalized ransomware approach to emptying your pockets, pioneered by Adobe, appears bound for your OS. That means, no monthly fee, no access to any of your personal files or data while MS will continue to hold, peruse, use, and sell all such data it has hoovered up from your Windows devices.