In regard to mentioned concerns about data farming, I don't think that Microsoft will necessarily push it much. Companies like Alphabet or Meta, they seem to rely a lot on B2C (business to customer) revenue. Meanwhile, Microsoft had e.g. in 2022 only 12% from Windows, 8% from gaming, and 6% from search advertising. While 23% of revenue came from office products and services, and 34% came from server products and cloud services.
In other words, Microsoft is very busy with B2B. Like, servers of a number of companies, they run on Windows, Office is heavily used in many an office, with licensing for it, and so on. And for Microsoft, there is way more to be gained by being like: "And how may we help you further?", than by being like: "We want all that data, even though at least in Europe, we are not really allowed to have it if there is not a specific consent to use of that data." - and at least here in Europe, many a company lawyer would not likely agree to any licensing agreement, which would make the company liable if they were to give Microsoft i.e. personal data of the company's customer (without consent thereto by these customers).
And in that context, when a lot of the "new Office suit" can be run within a local network, or even on a laptop itself, then that actually helps to limit the data spread, when the user is going to use some of the new features anyhow.
(Disclaimer: The company I work at, it has some collaboration with Microsoft going. So, that may make me biased, perhaps. But, just meant to point out, that Microsoft has a bit more going on, than to be interested in some: "We are going to sell an analysis of your most watched cat pictures to an advertiser, who then will have the ads AI-tailored to sell you whatever with a pic of cat.")