At Ignite we announced a major improvement to the way secure external sharing of files and folders works in both OneDrive and SharePoint in Office 365 and we wanted to share what this means for users...
Updated Jun 25, 2020
Version 4.0
Blog Post
Is there a projected date on when the EDIT IN APPLICATION (WORD, EXCEL, PPT) will be turned back on for external users who have Office subscriptions? Only editing in the online version affects the companies that use track changes in WORD with external users. I understand track changes are visibly turned on in the online version, but the user who is editing the document online cannot review the prior changes, etc... This loss of functionality is hurting the adoption of collaboration for those that constantly use track changes for their business process...
As a workaround, we share a SharePoint site, which uses the authentication method of a Microsoft account, so they appear in AAD. Once their account has authenticated, the user will no longer experience issues with editing documents in the application on their desktop. I am hoping this issue can get resolved quickly so admins do not have to keep doing these workarounds to allow a user to edit in the application.