Office 2021 LTSC & Most Recent Used History

Question

We are running Microsoft Office 2021 LTSC with Server 2019. SSO is used for authentication. When a user signs into their VM, SSO authenticates them into Office 2021 LTSC, Microsoft Edge, and SharePoint. We are not an Office 365 environment. We have no O365 licenses assigned to users except for the SharePoint feature. We do have Sharepoint though for Office 365 assigned to all users. Here is my question.

1. When the users are in Excel or Word they have their MRU's hisotory available. The users are signed into Office using their corporate user account via the SSO process.
2. If the users sign out from the Office aplication, it will sign them out from all Office applications and gives them a prompt informing them of this.
3. Once the sign out is completed, the users MRU history is gone.
4. If the users sign back into Office the MRU's history returns.

Why is the MRU gone? We thought this was saved on prem in the users profile? If it is saved to the cloud, is it saved to Azure or Office 365? Can this be modified so MRU will cache on prem? I don't like that this data like in the past is reliant on the cloud where in the past MRU was all in a users profile on prem.

We are an on prem environment. VM's are on prem. File Servers and FSLogix user profile containers are used for every user.

Looking for some answers. I appreciate anyones time and response to this inquiry.