A family of Microsoft word processing software products for creating web, email, and print documents.
I'm experiencing this too, it's something I can reproduce by creating a new template in OneDrive then a new Word document based on the template then close and attempt to open the new word document. It only happens for me if the template is stored inside OneDrive, it works if it's stored outside OneDrive, and it doesn't matter if the created Word document is stored inside OneDrive or not for either case. I have seen it work opening the new document the first time occasionally (but not the second time) it prompts for a username and password which failed because I have 2FA turned on and received an email from Microsoft saying I need to use an app password.