I'd argue that Office has competition in the form of GSuite, which has collaborative features

So how much market share does Office have to lose to GSuite before Microsoft can implement features that their competitor has?

Put another way, does a dominant market player have to stagnate in order to avoid breaking antitrust law, rather than anticipating the needs of their customers to make their product more useful?

I cannot speak about when office (and Windows) would be considerd "small" enough to not fall under these law. For now not even Microsoft makes this argument.

As far as I know they can innovate on the actual product as much as they want.

Teams itself may be the best software product ever. The issue lies in Microsoft using it's ownership of Office and Windows to "force"/"sell" it to customers.

The details of what that means exactly will be decided by a court.

> There really is no practical way around it for businesses

No one I work with uses Office. I work for a business.

Fair.

Let's say most office based businesses with at least a handful of employees do absolutely need Office or Windows.

I think the best argument I've heard against this is that it kills innovation. If products win in one category by default because a company already won in a different category then we lack the healthy an competitive environment for innovation to thrive in.