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TL;DR To solve it, use MAS or abbodi1406's KMS_VL_ALL to activate Office.

Reasons

Office Click-to-Run builds (since February 2021) that are activated with KMS check the existence of a KMS server name in the registry. If the KMS server is not present, a banner is shown in Office programs notifying that "Office isn't licensed properly"
If 32-bit Office is installed on 64-bit Windows, Office checks the KMS server existence in the corresponding WOW6432Node registry key as well.
Apart from this, they also detect if a registered KMS server is on their blacklist or not. As far as I know, the below 3 addresses are blacklisted.
km-s8.MSG-uides.com km-s9.MSG-uides.com 0.0.0.0 (Remove hyphen)
The first two are public KMS servers and the last one is not a real IP.
Please note that these checks are not performed by Office if the proper installation of the Volume version of Office is done with Perpetual2019 / 2021 VL channel.

Solutions:

Below, you can find various ways of avoiding this banner. The simplest option for you is to just use an Office activation tool mentioned here.

1- Activation Tools

Use MAS or abbodi1406's KMS_VL_ALL to activate Office.

2- Manual Activation

In this section, I'm only going to mention how to set up the KMS server in the registry properly.

If using Public KMS server:
Since they can put any public KMS server on the blacklist, as a permanent solution, we can instead use server IP instead of hostname.
If using private KMS server IP:
Make sure to use a valid private IP address.

Below, you can find how to set the KMS server address in the registry. For example, with a private IP 10.0.0.10

reg delete "HKLM\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform\0ff1ce15-a989-479d-af46-f275c6370663" /f

reg delete "HKLM\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform\0ff1ce15-a989-479d-af46-f275c6370663" /f /reg:32

reg add "HKLM\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform" /f /v KeyManagementServiceName /t REG_SZ /d "10.0.0.10"

reg add "HKLM\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform" /f /v KeyManagementServiceName /t REG_SZ /d "10.0.0.10" /reg:32

3- Install VL Office

As mentioned in the Reasons section, these checks are performed only if Retail Office is installed and was later converted to VL. The office doesn't perform any kind of related checks if the proper installation of the VL office is done.

Please see the guide here for VL Office installation.

4- Change Update Channel

If we change the Insider or Current update channel to Monthly Enterprise or Semi-Annual channel then such non-genuine banners won't appear by default.
Before doing this, make sure your Office update channel is either Insider or Current.
Make sure the internet is connected.
Open command prompt as admin, enter the below commands and press enter:

reg add HKLM\SOFTWARE\Microsoft\Office\ClickToRun\Configuration /v CDNBaseUrl /t REG_SZ /d "http://officecdn.microsoft.com/pr/55336B82-A18D-4DD6-B5F6-9E5095C314A6" /f

reg delete HKLM\SOFTWARE\Microsoft\Office\ClickToRun\Configuration /v UpdateUrl /f

reg delete HKLM\SOFTWARE\Microsoft\Office\ClickToRun\Configuration /v UpdateToVersion /f

reg delete HKLM\SOFTWARE\Microsoft\Office\ClickToRun\Updates /v UpdateToVersion /f

reg delete HKLM\SOFTWARE\Policies\Microsoft\Office\16.0\Common\OfficeUpdate\ /f

"%CommonProgramFiles%\microsoft shared\ClickToRun\OfficeC2RClient.exe" /update user

It will change the update channel to Production::MEC | MonthlyEnterprise
Make sure that Office starts updating with the last command.

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