Signing in to a Microsoft account will not produce any added functionality on 12.9" iPads.
Microsoft has a screen size limitation on features, and any device above 10.5" will require a 365 subscription to access file creation and editing features.
See here: Microsoft Word on the App Store
To create or edit documents, sign in with a free Microsoft account on devices with a screen size of 10.1 inches or smaller.
Without the subscription as said, you will be limited to opening and viewing existing files, but will not be able to edit them or create new ones.
A good compromise I have found, is to use Apple's entirely free Pages, Numbers and Keynote Apps, and then export the files in Microsoft Word, Excel and Powerpoint formats when required.