Looks like Office has a 'Mouse mode' and a 'Touch mode'. For some reason when installing Office 2016 in VMWare Fusion 8.0.1 (also in 8.5), Office thinks it should default to 'Touch mode'.

Chasing it is quite easy (once you know where to look):

  1. On the Quick Access Toolbar, Click the dropdown to edit it.
  2. Click Touch/Mouse mode
  3. Click the new icon to switch between 'Mouse mode' and 'Touch mode'

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