Hi @Varun Arora
Does this issue occur with all Office files?
Besides, where does these files stored?
If these fiels are from SharePoint, please make sure this Option was not hidden, for more please checkout "Enforce edit in browser"
Here is a similar thread "Edit in Word using Wopi and Office Online Server", you could have look.
(Please Note: Since the web site is not hosted by Microsoft, the link may change without notice. Microsoft does not guarantee the accuracy of this information.)
Hope the information could be helpful to you.
If the answer is helpful, please click "Accept Answer" and kindly upvote it. If you have extra questions about this answer, please click "Comment".
Note: Please follow the steps in our documentation to enable e-mail notifications if you want to receive the related email notification for this thread.