microsoft 365 multiple users

You need to read the licensing agreement for Office 365 or contact Microsoft for support on their product. I understand you are attempting to run 365 on your Mac however your question, is NOT an Apple or MM question, it is a Microsoft question. I would recommend using an Office 365 user forum such as:

https://techcommunity.microsoft.com/category/microsoft365/discussions/microsoft-365

hcsitas wrote:

You can do that but activate with the same paid ID on both.

I have only ever had to activate Office 365 in the Mac account that I installed it in. It works in the other Mac user accounts on the same Mac without additional activations.

Some apps do have that problem, that you need to activate them in each user account using the same credentials. But I haven't had that problem with Office 365. (On multiple Macs & versions of macOS & Office 365.)

Steve_JD wrote:

Is that from the App Store or Microsoft ? And personal or family versions ?

From Microsoft, Family Version. Installed on 3 Macs using the same MS Account. Multiple user accounts on each Mac.

You can do that but activate with the same paid ID on both.

App Store, personal version. Good practice for multiple frequent users would be to quit the MS application after each use. Note: quit is not the same as closing the window.

You’re probably right but I’m assuming it didn’t work for OP automatically.