Processes in Microsoft 365 for setting up Office apps, redeeming product keys, and activating licenses.
Same problem here, with the Office 365 subscription I get from work. Disabling "Optional Connected Experiences" (OCE) never works: I disable it, re-start Office (or the entire MacOS), go back into Office and I get the warning that I need to restart Office and the OCE is there again ticked.
My best guess is that my admins - whether willingly or not - have set Office so that I must use the OCE, and Office mistakenly offers me the option to disable it, and then fails, and then goes in some kind of loop.