Office365 still has a desktop executable, parallel to its online program. It's not all browser-only. I think that's why you two are talking past each other.
They're barely desktop apps - they're essentially bloated javascript heavy web-frame like apps that perform poorly, have many bugs (IMO 7~ years of use) and require login to Office365 / Azure online.
(While this is almost certainly the case for Office, a well-known leader in its category, it should be noted that this logic is not accurate for all products - Increased opportunity cost to the legal consumer and lack of piracy externalities such as network effects mean "always-online" requirements may be detrimental.)
If it's so easy to pirate office then the cloud-based authentication service only serves to cause issues for those who legally purchased the software.