Mostly agree. MS seems to not know how bad they are at marketing. It's like this is part of their culture, so when new, young, probably capable, marketing people join the team, they get dumbed down and beaten down by the marketing culture at MS to thinking in the same broken way.
Microsoft constantly shows it doesn't place any value on brand loyalty. Even productlines they still offer are now worth far less because of their brand mismanagement: Skype, Surface, and now Office. MS neither respects its brands internally nor cares for the customers by rewarding their brand loyalty. I find this unconscionably bad marketing strategy, something I'm passionate about in my own work.
Having said that, I do see some point in moving from Office 365 to Microsoft 365: they added a lot of tools that have nothing directly to do with the original Office components: OneDrive, Teams, Copilot, security monitoring, Power Automate, and more. Plus, they've merged it with Windows for enterprise licensing (Azure AD). If a company buys a M365 license for its employee, it includes what we would have previously called the Windows, Office, and other licenses, now all bundled together.
I'm not defending their branding change -- for all the reasons Jez points out, this squanders and devalues the Office brand, but you can see how MS, with their broken perspective, can think, "It's not just Office any longer. Now we include everything that makes Microsoft Microsoft, so let's just name it all together and build the overall Microsoft brand. That will also help as we add new services and features in the future."