Why does signing out suddenly de-activate office?

Microsoft has confirmed that subscription versions now require users to be signed in all the time. See this overview:

https://support.microsoft.com/en-us/office/how-sign-in-works-in-microsoft-365-1d646e83-1585-4278-8daf-d4a2cc0905e0#ID0EABAAA=signinmsa 

EDIT: As long as you choose to stay signed in, you should be able to disconnect from the internet. (The usual limitation that Office must contact the Microsoft servers once per month to verify your subscription does apply.)

The reason is not that signing out 'deactivates' Office as you were required to do previously.  You no longer need to 'deactivate' Office you can have as many instances of Office as you desire but you can only be signed into 5 instance of Office at the same time.  See this Article How Sign in Works

Thanks for the link Stefan, BUT is says exactly the same thing I already knew,

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You might lose some subscription features if you sign out. We recommend that you stay signed in to Office on the devices you use the most.

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That is what I expected. It is NOT what is happening.  When I sign out, the start an app I NOW  get

I don't want to sign in, so I click on that link then it asks for product key

Don't want to do that so I say Back, it takes me back to the first dialog, where I don't want to be.  So I click the "x" in the upper right (cut off from capture) to exit it, the app starts but it is DEACTIVATED

See the warning and the buttons disabled. The "Editor" is not part of 2016, so it is running 365 exe!

In File Account, it says 2016 Pro Plus, but I think that is an error, because I did have 2016 installed before 365. There is no way it is finding the 2016 application files, they were moved.

I searched for WinWord.EXE, the only one found was for 2010, which I also have (dual) installed)

So where did my 365 installation evaporate to?

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What EXE is it running to load the application that is not activated?

When I use the Win10 start menu to search for winword.exe, 365/2016 is not found!

When I search for Word, it does find a 365/2016 tile, so wtf is it looking at?

The 2016/365 shortcut is pointed to "C:\Program Files (x86)\Microsoft Office\root\Office16\WINWORD.EXE"

Now I have to figure out why Everything, and the Start menu, did not show that Winword.exe . Everything uses the NTFS index, so obviously Windoze is "hiding" it ...

When I sign back in to one of those deactivated apps, it shows signed in and this message

Strangely, when I restart Word Dictate shows up, while it was not displayed in the deactivated program ...

Bottom line, formerly did NOT happen this way

It is not the way MS says it supposed to work.

I have also seen this problem confirmed by yet another person, on only 1 of serveral machines they tried.  It appears to be a (dis)"improvement" that MS is field testing on unsuspecting (NON "insider) paying customers, to see about pushback.

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2020 07 08- Customer login now required to use Microsoft 365 apps?

https://office-watch.com/2020/customer-login-now-required-to-use-microsoft-365-apps/

    Is Microsoft account now required?

    Does it matter?

    Rental by person not for a device

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RonBaker:

In theory, your theory sounds good, but I don't think that is the case, because this is not happening to everyone. It is a trial rollout of a "new feature", or as I characterize it, a (dis)"improvement".

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Rohn,  See this Article How Sign in Works answers the OPs Question:  "Why does signing out suddenly de-activate office?" 

PS: See the 'old' article 'Deactivate an installation of Office'   "If you have an Microsoft 365 subscription, you can sign out of Office on a PC or Mac remotely from any web browser to deactivate the installation. Because Office will sign you out of devices automatically to stay within your sign-in limit, there's no longer a need to use this process to free up installs. For more info, see How sign in works in Microsoft 365."

There is no longer any instruction about 'deactivating' as it used to advise.

Rohn, the article says, "Office remains activated as long as you're signed in. If you sign out, you'll be prompted to sign in again." That is a clear statement that something has changed. Here is a screen shot from the article: