Processes in Microsoft 365 for setting up Office apps, redeeming product keys, and activating licenses.
The "free office 365" license that "comes with" a computer is a relatively new innovation. Only about a year, or so.
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The way it generally works is you will find an "Office" logo in the start menu. When you click on it you will be prompted for an email account. It will default to the Windows logon account, so you would have to change it to your personal email account. When you supply the email account and click OK it will activate a 1 yr Office 365 Personal subscription on top of your current Office 365 subscription. If you happen to have 365 Home, it will convert it to 365 Personal with the old expire date extended by a year. If you want/need to go back to 365 Home you will have to buy another 365 Home subscription (either directly from MS or from another store). When you activate that key your subscription will be changed back to 365 Home with an expire date 2years plus the current remaining fraction.
Yes, it is a little convoluted, but what do you expect from MS
Take a look at this article from MS