Although I personally ditched MS Office > 25 years and switched to Open Office and later Libre Office, I actually think they made the right decision, and I also see a lot of misunderstandings here.
Euro Office and OnlyOffice
To understand Euro Office it is important to understand that this is a fork of the AGPL licensed OnlyOffice. OnlyOffice is an Office suite that runs as a desktop application on Windows, Mac and Linux. But its main usage is in that it also run on a server giving you a full featured office suite that runs in the browser.
I have used the desktop version when I get documents in MS format that aren't handled properly by Libre. Notably embedded media of presentations didn't work for me in Libre when they worked well in OnlyOffice.
Unfortunately there are some questions on the background of the company behind it. There apparently are still strong ties with Russia. So companies have serious reservations on using OnlyOffice.
Nextcloud and Only/Euro Office and Collabora/LibreOffice
If you haven't looked up what Nextcloud is do so. It is not a cloud offering. It is Open Source software that allows anyone to self-host a 'cloud' offering you functionality like MS 365. You can self host, both as an individual as well as any organisation. There are also multiple third parties that host for you if you prefer.
For the functionality to allow you to create and edit documents in Nextcloud in the browser, it needs an 'engine'. You could use Collabora (based on LibreOffice) or OnlyOffice. This is actually the killer feature. Working simultaneous in a document is an important feature.
Collabora works pretty well for your home setup. I use it in my own Nextcloud deployment. However compared to OnlyOffice it is pretty clunky. If you get a setup with many users, OnlyOffice works a lot better. This has largely to do with the architecture and is not easy to solve.
Nextcloud the company
I have followed to some degree Nextcloud the company for a number of years. I am convinced that they are a genuine Open Source company. I realise there are never guarantees, but so far they walk the walk and talk the talk. They have a clear business model. They do not want to make money from your home setup. They like (don't demand) to see setups with large user bases to get their enterprise offerings which means support. The free/open versions are not crippled in any way. As far as I can the tell, the only technical difference is that you get extended support on older versions and can opt to be more conservative as new features end up in new releases a bit later.
They also don't offer a Cloud service themselves, they leave that to third parties.
Euro Office and sovereignty
Mainly due to the reservations organisations have with origin of OnlyOffice, but also apparently that cooperation with the company OnlyOffice was troublesome there is actually a great demand for a trusted fork of OnlyOffice. This is why Nextcloud, together with partners, did just that. They forked it.
I like LibreOffice very much, have donated to them and will continue to use it. That includes Collabora on my Nextcloud server.
But I have to agree that for a serious alternative to MS, OnlyOffice, and now Euro Office is much better suited.
IMHO LibreOffice shot itself in the foot for ignoring the demand for online office. Collabora bravely carried the torch, but strictly from the users perspective, the browser based version is not all that. And apparently, due to the architecture of Libre, this not something that is easily fixed.
OOXML vs ODF
So it makes sense for Nextcloud to prefer EuroOffice as the office engine. They deal with customers. The ODF support however is currently sub-par. So they kind of have no choice to for now make that the default. They have said that one of the things they are committed to is to improve ODF support. It is just too early for that.
Sovereignty
If you are not from Europe you may not realise how serious the move to be less dependent on the US (or other non EU powers) is. This is not a boycot or anti US, we've had a wake up call that we currently are way too dependent. US tech is not blacklisted. We just have become cautious to become too dependent and require real exit options.
When it comes to digital sovereignty it is not just the attitude of the current US administration, but also what happened to VMWare after the Broadcom takeover, MS price increases and increasingly enshitification. People that just a few years ago would blindly gulp of everything MS and the likes offered, thought that concepts of vendor lockin was just stupid hippie talk, are now actively looking for alternatives.
So in my opinion
I have to agree with Nextcloud / Euro Office to choose OOXML for now. I hope that in stead of finger pointing to Euro Office and Collabora, the document foundations focuses on improving the online Libre Office.