(a little late to the party, but wanted to post the solution in case anyone else has this issue)
The main issue is not the license, but the Microsoft AutoUpdater (MUA) version 4.67 on macOS Sonoma. I ran into this issue when I was working on our Macs here. The message to upgrade is for the macOS, not Office... the poor updater is confused because it doesn't recognize that Sonoma is the latest OS...

To fix it:
Open Microsoft AutoUpdater and disable the Auto Update option.
Uninstall Microsoft AutoUpdater by going to Go to Folder... and then type /Library/Application Support/Microsoft/ and press enter/OK to go to the folder.
Move the MUA or MUA 2.0 folder to the trash then empty it, then restart.
Download the MUA version 4.60 from Microsoft, then install it.
Once the install is finished, it will open up. Make sure that the Automatically download and install updates is unchecked. If it is still checked, it will update the MUA first then you will be stuck again and repeat the procedure.
From there, none of the apps should be showing a checkbox to autoupdate. Update all the Office apps but NOT THE AUTOUPDATER! :)
Once you have updated office to version 16.80 (or whatever it is now) then you can update the Autoupdater.
Note: I have only seen this issue with only the MUA version 4.67 with Office version 16.78 on macOS Sonoma. The Office download for new installs should already be updated, but I guess it will depend on the Channel?