Odd... I remember editing Word documents in Microsofts cloud offering as far back as 2012 ~ 2013. Maybe even sooner? Point being this is just a marketing piece. In Microsofts case you likely will still be able to work offline. I was editing files on both desktop and web at my former job. Its nothing new to Microsoft. Personally I prefer Office to Google Docs.
It's generally wise to be skeptical of this sort of demonstration. It's been my experience that the cool stuff that Microsoft shows off at these events might actually land in six months to a year, sometimes farther out, if it actually comes about at all. I've been beating my head against the wall with Teams for a couple years now, as features drip out like molasses - there are things I saw demoed almost a year ago that won't land before Christmas this year.
Also when people start the hand-waving about plugging in arbitrary bits of AI to help out with tasks, my engineer brain explodes a little bit, because that is hard to do right, beyond cute little proof-of-concept demos. It's great to demonstrate and put in the marketing material, but the real-world usage and effectiveness often leaves a lot to desire.
https://news.ycombinator.com/newsguidelines.html