If users manually log their licensed accounts in to Office apps, Office will be activited automatically.
For Microsoft 365 apps, each installation is activated and kept activated automatically by cloud-based services associated with Office 365 (or Microsoft 365). This automatic activation means you don’t have to keep track of product keys and you don’t have to figure out how to use other activation methods such as Key Management Service (KMS) or Multiple Activation Key (MAK).
For more information, please refer to "Overview of licensing and activation in Microsoft 365 Apps".
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