Microsoft Office 2021: No Save, no Edit, no Create

If you find your Microsoft Office 2021 for Mac version operating in what Microsoft terms Reduced Functionality Mode — no file editing, no file saving, no file creating, only opening and printing existing files — then you will want to try an update to a newer version and test again.

If you cannot update, and if you particularly have either 16.114.1 (26102031) or 16.114.2 (26102345) installed, you may or will need to manually update to 16.114.3 (26102720), or later.

Manual update:

1. Uninstall all Microsoft apps from your Mac.
2. Remove the Microsoft product license using Microsoft_Office_License_Removal_2.7.pkg
3. Download version 16.114.3 (26102720) from https://learn.microsoft.com/en-us/officeupdates/update-history-office-for-mac
4. Install and license-activate Office 2021.

The problematic updates appear to be 16.114.1 (26102031), and 16.114.2 (26102345), and this error is reportedly resolved in 16.114.3 (26102720)

Above info from various sources, as well as a posting by user KS at the Microsoft support forums and 6x6 here in ASC.