This is already how alternatives like google docs work, being cloud first so I think it makes sense for Microsoft to follow as its natural to want to be able to read, modify, and share documents from various computers.
This is a naive take because it ignores the presence of the third-party doctrine. The moment any file is uploaded to the cloud, you lose an expectation of privacy. When we decided to put everything in the cloud, I think most people sort of forgot about this, but it doesn't make it not relevant.