Well, @Jiajing Hua-MFST I've solved the mystery. It turns out the old action pen is gone and has been replaced by the ink to text pen.
This is so frustrating - first of all, the replacement is a far inferior tool for people who want to edit using a smart pen... The action pen was much much more intuitive and worked way better. I've already submitted feedback about that.
But what's even more frustrating is that this isn't the first time I've reached out to Microsoft for help only to basically solve the problem myself ... (https://insider.microsoft365.com/en-us/blog/ink-to-text-pen-now-available-in-excel-for-windows - this talks specifically about Excel, but it's the same story for Word). What's the point of help if the staff isn't trained on what Microsoft is doing or on who to ask so they get receive accurate information?
I miss the days when there was an alternative word processing program. If there were one, I'd never use Microsoft.