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Dear ChamE Kim,
Thanks for writing back and updating with us.
As per the further updates, the problem shouldn’t be caused due to the File Size because the maximum size limit for the individual file is 250 GB and even for the Sync is 250 GB:
To my knowledge, the file type in the question is the problem because XLSB file types is not a friendly supported document for co-authoring. However, since the problem is happening with all users, I believe the problem should be further checked by related development by collecting the fiddler logs and I suggest you raise a support ticket from the Office 365 admin center, where the related team will collect the logs and find out the exact cause of the problem.
Reference: Get support - Microsoft 365 admin | Microsoft Learn
Note: To create a support ticket, you need to have admin privileges and if you aren’t admin of your Office 365 organization, please contact the admin of creating a new ticket.
Apologies for redirecting you to the related development team support as the moderators in this community have limited resources to collect and investigate the Fiddler logs, and to get the fast and better assistance we requested for it.
Appreciate your patience and with us. Have a great day!!
Best Regards,
Sophia