I'm the starter of this thread and wanted to share the most recent update about the issue of the page scrolling back to where the cursor is. I'm still having this problem and have not been able to use Microsoft Word because of it. During this time I've been in weekly contact with Microsoft Support T3, which is one of their highest level support, and who is in contact with the engineering team if I understand. Short story is that they say they are working on it, and indeed they have asked for videos reproducing the issue, log files, troubleshooting steps, and the like, which I provided to them promptly over the last weeks, and as recently as today. The only thing I haven't yet done is to factory reset my Ipad, because it is a big trouble and I'm not sure it will solve it. If you reset your Ipad and can definitively say this issue is not happening anymore please let us know.
Microsoft Support said they have not been able to reproduce the issue on their own equivalent device, and that they have not seen any reported cases in their Microsoft Support system about this issue, which to them makes it probably not a super high priority. However, I notified them of some complaints in the app store that seem to be related, and also had already notified them about this thread where others have been reporting this problem. So if you're having this issue consider reporting it to Microsoft Support. But that takes a long time and many people will not officially report it, or they might not fully go through with it, and I'm afraid maybe in some cases it might count those unresponsive cases as resolved. Then also the Microsoft people will have to somehow notice that an open case in their system is the same issue as this case, so there are many things involved, and I wouldn't be surprised if there are related cases that they haven't noticed.
Because I can't make use of Microsoft Word right now I'm using the Apple Pages app, but if you move to that be aware that it also has some issues, like when I was working on a document on the OneDrive cloud which Apple Pages said it works with, but then I noticed that most of my work for the day didn't get saved and got lost, so instead I'm using it in local drive mode which seems to work.
I agree with the other comments about why there are so many bugs on Microsoft Word Ipad, and in the past I had other issues with it, as well as with other apps such as Google Docs app on another device a long time ago, Apple Pages app which I mentioned, and the like, so it is a widespread industry problem I believe. Yet this is a relatively simple and classic app that was running on much weaker computers in the 1990's, and it's also an important app because it is handling people's important documents, and it is a paid app in the case of Microsoft Word for Ipad. Yet for some reason I can play complex and resource intensive games on the same Ipad, like PUBG Mobile, which is a free app made for fun, and also is not a big corporation like Microsoft, and yet I never experienced a critical bug with that.