It is possible an upgrade to Ventura on a Mac that is not supported

Big Sur is supported only by the systems on this article:

Big Sur a Migration tip - Apple Community

See my earlier post about cloning and its advantage.

If you get a newer Mac, you can use the migration assistant to import data to the newer Mac.

Keep in mind with the M1 chip on 2020 and later Macs some older software may not work.

A good idea is to keep a clone backup. That way, in case you accidentally install an update that no longer works on your OS, you'll still be able to recoup the old licensed version with ease. The other thing is, Microsoft has already turned off their licensing server for older versions of office. As long as your computer has all the details of the license on it, that should not be of concern keeping the older OS. That's where a clone can come real handy in case something breaks down. You may not necessarily get the licensing info in a Time Machine, or Document/Application folder only backup.

There remains an Option from Apple for this machine if interested ?

If the user whats the latest and greatest versions of macOS, all is not lost.

If the user wishes to explore the Apple Trade-In  Process where the Value of the exiting device could be used against the cost of a new Apple Computer, iPhone or iPad  

Or Shop Refurbished Apple computers at an Apple Reduced Cost

Have used both previously and have been satisfied each time.

Your Mac is obsolete/vintage. Here are the hardware requirements to run Big Sur:

macOS Big Sur - Technical Specifications

The version of MS Office that you have on your Mac will continue to work just fine. You do not need to upgrade to Big Sur if you don't want to. You just won't get any more Office updates while on Catalina.

You can ignore the MS Autoupdate message, or better yet at this point turn it off.