This is not listed as a general Microsoft-known issue, so an administrator should first check tenant Service health and then validate the affected desktop installations’ update channel, license state, privacy settings, and connectivity.
1. Check whether Microsoft has posted a tenant-specific incident
Because several licensed users are affected, rule out a service-side incident before changing individual installations:
- Sign in to the Microsoft 365 admin center with an account that can view service health.
- Go to Health → Service health.
- Review:
- Active issues Microsoft is working on
- Issues for your organization to act on
- Issue history for the previous 7 or 30 days
- Look for advisories involving Microsoft 365 Copilot or Microsoft 365 Apps.
Service Support Administrator and Helpdesk Administrator roles can view Service health. An advisory may also contain a Microsoft-provided workaround or resolution timeline.^1^
If an applicable incident exists, avoid reinstalling Office across the affected devices; track that incident instead.
2. Validate the desktop build and update channel
On one affected Windows device:
- Open Word or Excel → File → Account.
- Under Product Information, install available Office updates.
- Check the displayed update channel.
- If it says Semi-Annual Enterprise Channel, ask the Microsoft 365 Apps administrator to move the device to Current Channel or Monthly Enterprise Channel. Copilot features enabled by an assigned license are not available on Semi-Annual Enterprise Channel.^2^
- Restart every open Microsoft 365 application and test the attachment button again.
Since the picker never opens, file format, size, and file permissions are not yet the relevant checks; those apply after Copilot receives a selected file. Microsoft does document that local paths are not supported and that files must be uploaded or cloud-hosted.^3^
3. Refresh licensing and connected experiences
Still on the test device:
- Go to Word or Excel → File → Account → Update License.
- Close and restart all Microsoft 365 applications.
- Return to File → Account → Account Privacy → Manage Settings.
- Ensure these are enabled:
- Experiences that analyze your content
- All connected experiences
- If these controls are disabled or managed, review the corresponding tenant policy rather than changing the device locally.^2^
For macOS, use Word/Excel → About app name → More Info → Refresh License, restart all Microsoft 365 apps, and check Word → Preferences → Privacy for the same connected-experience settings.^2^
4. Run Microsoft’s built-in connectivity diagnostic
On an affected Windows computer:
- Open the Get Help application.
- Search for Copilot connectivity troubleshooter.
- Run it and review its findings for firewall rules or other connectivity blockers.
- If Copilot licensing or controls are also missing, separately run Copilot License Troubleshooter.^4^
5. Escalate with a reproducible comparison
If no service advisory exists and one fully updated Current/Monthly Enterprise Channel device still fails:
- Record the Word/Excel version and build from File → Account → About Word/Excel.
- Capture whether the failure occurs in both Word and Excel.
- Test the same licensed account on another desktop device to distinguish an account/tenant issue from a device issue.
- Record the exact time, affected user count, tenant update channel, and results of the connectivity troubleshooter.
- Open a Microsoft 365 support request and state that Upload file and images is clickable, but no operating-system file picker opens, while Copilot itself remains available.
The cloud-file and web methods you identified remain appropriate temporary workarounds, but they do not resolve the desktop picker failure.
References
- How to check Microsoft 365 service health
- How to find and enable missing Copilot button in Microsoft 365 apps
- File upload in Microsoft Copilot
- Copilot troubleshooters | Microsoft Support