Tried to install MS Office 365 on a M1 MacMini a couple of days ago and ran into terrible problems. After countless MS support sessions and a remote session that went on for hours this is what happened: A fresh download & install of the latest O365 versions (16.44) worked without any error message, but the license could not be activated permanently and thus, the apps were not usable. This is the solution: I had to go back to O365 version 16.40, activate the apps and upgrade from there.
YMMV.
YMMV.