Yes, Microsoft 365 Apps is licensed on a “per user” basis.
If the computer goes offline for more than 30 days, Microsoft 365 Apps enters reduced functionality mode until the next time a connection can be made.
"Because of its online activation features, Microsoft 365 Apps won't work on computers that are completely cut off from the internet. For those computers, we recommend installing Office LTSC Professional Plus 2021 and using a traditional activation method such as Key Management Service (KMS) or Active Directory Domain Services." This is from link: https://learn.microsoft.com/en-us/deployoffice/overview-licensing-activation-microsoft-365-apps#activating-microsoft-365-apps
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If you do not sign account into Microsoft 365 Apps, you will not use Office successfully.
Once you open one, it will ask you sign into an account.
