A family of Microsoft presentation graphics products that offer tools for creating presentations and adding graphic effects like multimedia objects and special effects with text.
Solution: as the issue appeared recently, I uninstalled ALL MS Office updates I could (December 13th back to October 4th 2017; the system did not allow to uninstall some), restarted the computer, and the problem's gone. I can embed or link the worksheet in PowerPoint, edit, etc.
System: Windows 10 home 64b, MS Office 2007 Enterprise 32b.
Unfortunately, I do not know which update was the culprit as there were too many of them to test every one, and not installing the security updates does not seem like a great long term solution, so still waiting for ms to fix the problem.
On the other hand, the oldest posts about this problem date from way back so ms has ignored the problem for years. Motto: because they can!