They absolutely ARE the fault of Microsoft. Even if we were to assume your premise, and assume that iPadOS is limiting them so much (which I’ve seen developers/coders say ISN’T the case), there is obviously nothing preventing Microsoft from supporting basic features like custom document templates, inserting images into documents from OneDrive or Files, precise alignment tools for page items like images, more file export support, etc… These are all present in other apps on iPadOS, and in many cases, even other Microsoft apps on iPadOS! For example, OneNote has options for inserting images from Files and OneDrive. So no, at the very least, the majority of these basic features that are missing from MS Office apps on iPadOS are 100% Microsoft’s fault…
Also, if Microsoft couldn’t deliver more full-fledged apps due to limitations of iPadOS, then I’m sure they would be telling people so and blame-shifting on Apple in the feedback forums like many other software companies lie when they simply don’t want to deliver some feature, and so blame Apple. But they don’t, they’re actually pretty open about the fact that they want to keep the iPad and Android versions of the apps a “light, primarily document viewing” experience… They aren’t like “man, I wish we could do that, but Apple just won’t let us with iPadOS”, or any of the similar such drivel that some of these developers use as an excuse (because, yes, much of the time, it is only a lie and an excuse, because these features are completely possible to implement on iPadOS within apps)…
Also, if their goal weren’t to push for Windows and Surface Pro lock-in, then the web versions could be far more full-featured and capable. There is zero reason the web versions would be so hobbled if this were just about iPadOS and not Microsoft’s very intentional and anti-customer strategy to push Windows lock-in, and try to artificially prevent other tablets from competing with their Surface crap…
This is 100% on Microsoft and nobody else. Period.