A family of Microsoft word processing software products for creating web, email, and print documents.
It's true now. Microsoft has recently changed how Insert>Object>From File works.
If that feature is important to you, you can uninstall Office for Mac by following these steps: Uninstall Office for Mac Then reinstall an earlier version from this page: Update history for Microsoft 365 Apps After activating the software, immediately choose Help>Check for Updates and uncheck the option to Automatically keep Microsoft apps up to date. Otherwise, Office will reinstall the latest version.
You can let Microsoft know about this issue by choosing Help>Feedback>Report a problem.