The issue is primarily related to the filename. What you need is
Code:
Sub ConvertHTMLtoDOC()
Dim strFile As String
Dim strPath As String
Dim strDocName As String
Dim oDoc As Document
strPath = "C:\scratch\"
strFile = Dir(strPath & "*.htm*")
Do While strFile <> ""
Set oDoc = Documents.Open(strPath & strFile) 'This line needs to include the path
strDocName = Left(oDoc.FullName, InStrRev(oDoc.FullName, ".") - 1) & ".docx"
oDoc.SaveAs2 FileName:=strDocName, FileFormat:=wdFormatDocumentDefault
oDoc.Close
strFile = Dir()
Loop
Set oDoc = Nothing
End Sub