People realized that actually it requires a lot of investment to produce an office suite.

What changed? It's now trivial to write exporters for Office formats for specific use case. Save a sample of what you want to have exported, and then just template the XML, generate it based on source data and zip it.

Most of the time you don't even need to read the specification.

Compare that with the times of eg. closed binary XLS format.

I've observed that the quality of third-party SDKs for Microsoft office formats improved substantially. The .xls format was notoriously fickle to process or produce from outside of Excel. As of .xlsx, the open source community produced myriad SDKs in various languages, and the ones I have experience with worked quite well. The format becoming less arcane and better documented was important to enable this.

We did get Libre office and Apache OpenOffice due to that? I think they both should become obsolete in an ideal world where folks converse in fluent markdown to achieve everything they want in a document.

No, LibreOffice (and Apache OpenOffice, but Apache OpenOffice is pretty much dead and nobody should use it) are descended from Sun's OpenOffice.org, which is descended from their acquisition of StarOffice. See https://en.wikipedia.org/wiki/LibreOffice

LibreOffice uses the OpenDocument standard. https://en.wikipedia.org/wiki/OpenDocument

Microsoft's "open" standard, "Office Open XML" was created in response: https://en.wikipedia.org/wiki/Office_Open_XML The standardization process was incredibly irregular (see Wikipedia and LWN from that time period.) I'm sure the naming was not intended to sow confusion at all.

It's not really open, nor is it really the MS Office documents format.

And yet, a few competing alternatives appeared anyway.