Intune App Protection Policy Still Allows Access to iOS Files App

I'm testing a very restrictive Intune App Protection Policy for Microsoft Word on iOS. The policy successfully blocks actions such as saving company data to unmanaged locations, copy/paste, screenshots, printing, and data transfer to other apps.

However, users can still open Word, browse the native iOS Files app, open personal/local documents, and modify them.

Is this expected behavior? In other words, do App Protection Policies only protect organizational data, while still allowing access to personal files stored on the device?

Has anyone found a way to prevent Word from browsing or opening local files through the iOS Files app, either with App Protection Policies, App Configuration Policies, or MDM restrictions?

Thanks in advance for any insight.