I agree that it is not the overall Compatibility Mode feature; when I upsaved a copy, the issue remained.

Embedding fonts would make the file size much larger, even if including only those that are used in the document.

Round-tripping the file to .doc, .xml, and .odt and back to .docx did not shake out the issue.

I went back take another look, because I'm a glutton, and this time, instead of changing Custom to Word 2013-2021, I unticked the only custom setting in the list -- Use Word 2010 table style rules -- then OK. No change.

So I went back in to Compatibility options for, changed Word 2013-2021 back to Custom, then ticked Use Word 2010 table style rules again, then OK. That also fixed the problem.

I think that the OP's Word is somehow messing with the settings, but how or why is behind my limited knowledge of XML.