Why need to update when I subscribed to MS Office 365?

The version of 365 you have installed may be too old to run in Catalina. In other words, you haven't applied any updates to it in a long time.

The current version is 16.38. You can download the installer directly from Microsoft. Click on the link for Office suite (without Teams). Unless, that is, you do use the Teams version.

https://docs.microsoft.com/en-us/officeupdates/update-history-office-for-mac

You may not have automatic updates turned on. See the following for information on how to update: https://support.microsoft.com/en-us/office/update-office-for-mac-automatically-bfd1e497-c24d-4754-92ab-910a4074d7c1