Hi Mahee,
Just to check, do you have an organizational account signed in to your device? If yes, this error indicates that your Microsoft 365 account is restricted by admin policies, not that Word itself is broken. Even though you signed in successfully, your admin has set conditional access policies that prevent opening Office apps from certain locations, devices, or apps.
To fix this, you need to contact your organization’s IT admin and ask them to review the conditional access or security policies applied to your account. Once the restrictions are adjusted (for example, allowing your device, browser, or app), you will be able to open Word documents normally.
For personal accounts, this usually happens if the account was accidentally added to a work/school tenant with restrictive settings. In that case, signing in with the correct personal Microsoft account will solve the issue.