Collaborating on External Documents

[TFalcon]

Hello, 
I am new to SharePoint and am unsure if a solution I am trying to implement is possible or even the best approach. 
I have a document set, some of the documents have protections enabled and need to be shared externally with unlicensed users for collaboration.
I am testing this by sending a link to my personal email, because protections are enabled I would have to open the file in my desktop and edit from there. The issue is that the changes made here do not sync back to my SharePoint library. 
Is it possible to sync changes made by unlicensed external users, or do I need to rethink my approach? 

[#2]

@TFalcon 

In your SharePoint Admin Center, what settings do you have on the Policies | Sharing page please, as per the example below;

[#3]

@PeterRising 

I was using the email link to verify access to the document.

I was able to access the document and open it on my local desktop, but the document downloads as a new file in the process and changes do not update in SharePoint.

[#4]

@TFalcon 

Hmm, that's weird then.  Do you have another computer you can try this on to see if the experience is the same?