Symptoms

Office 365 apps published from Windows Server 2019 or Windows Server 2022 hosts can't be activated as the popup window prompting for password isn't displayed:

Workaround

There are four possible workarounds:

• Enable option Use RemoteApp if available as described here. Please take into account that it will resolve the issue only for users running Parallels Client for Windows
• Publish a desktop from the same host, so users will be able to activate Office 365 when they start the apps in the full desktop session
• Use Windows Server 2016 RDS host for publishing Office 365 applications
• Use Microsoft Office 2016 or other edition with VLSC activation

Resolution

Make sure you're running latest version of Parallels RAS

Apply "-runexplorer" parameter to each published Office 365 application (Office, Word, Outlook, etc) per following article:

Applying "-runexplorer" parameter to published applications