Office users are signed in with .local accounts in Outlook

Hi.

Hence the possibility to use Office Message Encryption to encrypt pretty easy from Outlook, I have seen several environments, where the users aren't logged in to Outlook. 

Trying to connect to Azure Information Protection fails, then checking Files > Office account > Here the users are logged in with a .local account.....

Cant this be changed using a GPO for example? Or do all users need to sign in in Outlook with their Office 365 account?