I have a problem where a client using M365 occasionally experiences an issue where an inserted Excel file in Word suddenly turns into a PNG file. According to the user, they save it normally, and recreating the error doesn't work. This happens sporadically, about once every few weeks. Does anyone know what could be causing this and how to prevent it? Also, is there a way to revert Excel files that have turned into PNGs back to their original format?

That is odd. Converting a spreadsheet into a PNG sounds like something a browser would do to a file.

I really have no idea but I would ask - has the Word file been saved into a tool like Sharepoint and viewed/edited in a web browser. I have not had joyous experiences with ill-informed people editing Word documents via a web browser instead of the native application so I am thinking this could explain an intermittent reason why this conversion could happen.

If this is the cause, I would say you need to revert to a previous version to restore the content to spreadsheet.

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Andrew Lockton
Chrysalis Design, Melbourne Australia

The user is using the apps normally on Windows 10. It's not a case of the documents being created and saved incorrectly. A template is used which is then just modified. Most of these documents with the template remain as regular Word documents with Excel tables. However, some of them turn into a PNG after editing.

The problem is "apps normally on Windows 10." Microsoft has confused things immensely because there are multiple programs from Microsoft that could appear on Windows 10.
A key question is whether or not the file is being edited at any time in the browser app also known as Word Online.