According to
this website, "Word" isn't trademarked. Only the MS Word launch icon is trademarked.
If you look under "E", both excel and excel launch icon are trademarked.
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Also, because MS is such a huge company, I wouldn't doubt that legal and the app store teams don't necessarily work together too much. The app may have been approved 14 times by one leg of the app store team, but it may still take another couple weeks for a separate team to find your app and flag it for trademark violation.