Document in "Read-only" mode all the time

Another person with this, or certainly a similar problem (I'm working with a document that I've opened via the Browser, not the OneDrive sync client). I'm working on a customer site (using their wifi to connect to their SP Online tenant from my laptop that I've logged into using my organisational account)

Scenario is where I've worked on some documents in my OneDrive and when completed the first draft I've uploaded these Word documents to a SharePoint library on my customers tenant where they have reviewed. 

They've provided feedback and I now need to update the document. I can only edit the document in Word Online. 

Each time I click the "edit in word" button , the document will open in the Word client but only ever as (Read Only).

I can save as and overwrite the server copy but the document in Word still is a (Read-only) document.

My collaborator on the Customer side has closed out of the document and has repeated the same steps as I on his machine. The document opens up on his machine , in Word , for editing. 

I'll have to continue to use Word Online. which is not idea as I want to copy and paste in some screenshots into the document , and Word Online is not allowing me to do this! - advising me that i can only upload image files stored on my machine and not copy and paste :( 

I've heard other people complaining about this issue before.. Any ideas what the solution is or why it's happening? It's hardly "by design" is it?

Mirek_N Our issue was on SPO where we had given access directly to a library but not the site.

Limited Access Lockdown site collection feature was the culprit - disabling this allowed users to open excel documents as expected.

Mirek_N, this solved the problem for me:

I figured out how to fix it (per my related question at https://docs.microsoft.com/en-us/answers/questions/748329/sharepoint-files-open-in-read-only-mode.html and Idodero's post above suggesting a variation on this same approach). Seems the account connection can be corrupted, especially if using more than one account, so as with many things in Windows, this can be fixed by removing and re-adding the account. Specifically, in the offending Office app where the document appears as Read Only (this will make the changes to all Office apps), remove BOTH the Connected Services AND the account sign-in. Then re-add just the Connected Service.

Steps:

1. Click on File tab
2. Click on Account in the lower left
3. Under "Connected Services," click Remove next to all of the AD-connected accounts
4. Repeat steps 2-3 for all AD-connected accounts (at least for me, it was OK to leave the personal account)
5. In the Upper right (in the Title Bar), click on the Avatar icon (may just appear as initials) for your User Account
6. Click the 3 dots to the right of each AD-connected account and select "Sign out"
7. Repeat steps 5-6 for all AD-connected accounts (at least for me, it was OK to leave the personal account)
8. Close the Office application

I'm not sure if it's needed, but possibly also remove the Work Account from Windows:

1. Click on Settings
2. Click on Accounts
3. Click on "Access work or school" on the left
4. Select the problem Work account and click on "Disconnect"
5. To be safe or if this process fails otherwise, remove all Work accounts (easy to add back later)

With those done, you have removed the problem service. Now you can add them back safely:

1. Open the Office App
2. Click on File tab
3. Click on Account in the lower left
4. Click on "Add a Service" -> Storage -> One Drive for Business
5. Enter your email address for the AD account for the SharePoint/OneDrive folders you wish to access

This will also add the account to your Account menu, so no need to also add it there. If you selected to allow the account to also manage its settings, then this will also add it as a Work or School account in Windows Settings Accounts.

I resolved this by upgrading the Excel client (read only was only happening in Excel) to Microsoft 365 Apps for Business license rather than the Office 2019 Home and Business license that was previously installed.