This solved my problem. I had only ever booted up the application version of OneNote and not the Office version. Word was looking for the office version to have been booted, so it was throwing an error.
To find the 2 different versions, look up OneNote in the Windows search and select "OneNote 2016".
You can tell if this is effecting you because the icons are different. If you see a different icon for OneNote when the error comes up, then this is probably the problem.
Also note that is no way to delete the OneNote app, it is a default app. So for now we are stuck with both. I have removed all visibility for the app version and replaced it with the office version to avoid confusion (start menu, task bar, etc.)
Tech support help me through the issue so hopefully we will see it resolved in an upcoming patch.