This link is in French but as a summary: technical report shows that M365 Word and PPT contents leak to US servers (augloop.office.com) as soon as you open a document on a local installation of Powerpoint or Word, unbeknownst to users.
This is potentially huge!
I think this is working as expected.
M365 disaster recovery is the US. I anticipate anything opened locally syncs to OneDrive or other M365/services.
However, I don’t speak French so please let me know if I’m missing something.