Hello, thank you for reaching out to Microsoft Q&A.
The issue you're experiencing is caused by the latest Office for Mac update, Version 16.103 (25110922), which was released on November 11. Several users have reported the problem to Microsoft by submitting feedback through Help > Feedback > Report a Problem. You can also report here.
Meanwhile, you can try these temporary fixes below and see if they help in your case.
Option1.
Open Word > Preferences > Authoring and Proofing Tools, and look for the option labeled “Enable Copilot.” If you see it, simply uncheck the box to turn the feature off.
In the screenshot you attached, it seems that this option is missing for you. You can try option 2 then. (This helps other who have the option to disable copilot)
Option 2.
Go to Applications > Finder > Drag the Microsoft Word app to Trash.
Then install the older version from the link below. V16.102.3 (25110228) - released on November 4.
https://officecdn.microsoft.com/pr/C1297A47-86C4-4C1F-97FA-950631F94777/MacAutoupdate/Microsoft_Word_16.102.25110228_Updater.pkg
Also, make sure that automatic updates are turned off in Microsoft AutoUpdate.
Let me know if you still need more help.