Interim Success
Ok, I've found an interim solution though I still believe Apple has an issue since I have read that 14.1 does not have this problem but at least this works for now.. .. and don't believe that the issue lies with Dropbox, Synology DS File, Microsoft, etc, the issue is with Apple and they need to fix what they broke.
I took the Excel password protected file that I could not open directly from with the Apple Mail app on my iPhone 12 running iOS 14.2 (the same exact file worked fine in 13.6) and instead of opening it, I long pressed it in Mail until I got a pop up menu with choices. I like choices :-) I chose to Save that file in the Apple "Files" app on my phone. The File app comes standard with iOS. I then opened the Files app and tapped the password protected Excel file I just put there, it prompted for a password, I entered it and it opened just fine.
However, in order to get success, you first have to go to the Apple App store and download the free "Microsoft Office app for iOS", (see pic). Once downloaded to your phone you do not need to sign in to it or even have it open, just the fact that its on the same device as the file you want to open does the trick. The Excel file opened it in Excel.
I will assume this same procedure will work for Word and Powerpoint but haven't tried it yet.
So until Apple fixes the issue, there is another way to open a password protected Microsoft Office file on an iOS device running iOS 14.2