Sometime in January 2024, I was excited to learn that I could setup a Document Library in SharePoint Online, and have the new document open directly in the installed Microsoft application when clicking the "New" button (for example, a Word document would open in the Microsoft Word application, and NOT Word Online):
I've revisited the application today, and noticed this no longer works - when clicking on New, the document is always opened in Word Online. I've checked the document library settings, and can confirm that the default open behavior for browser-enabled documents is 'Open in the client application':
Is there another setting that I should be looking for? Is it possible my tenant was just being tested for this feature, before it was rolled back recently? I would really like to have this feature back - and no, I was not imagining that it worked in January, I performed client demonstrations and built a solution around it :)
UPDATE: On 12th April, it started working again - clicking new would open the new document directly in the installed application. However, by 15th April (the day I was going to do a client demo), it failed again, opening in Web App instead.

