Yes, KB5002914 is the update causing this, and you are right that it applies to classic MSI installations. My affected machines are Office Standard 2016 64-bit, MSI-based, installed under C:\Program Files\Microsoft Office\Office16.
The symptom is a crash rather than a silent failure. Excel terminates and relaunches quickly enough that it looks as though Ctrl+V simply did nothing. The Application event log shows:
Faulting application name: EXCEL.EXE, version 16.0.5569.1003
Faulting module name: EXCEL.EXE, version 16.0.5569.1003
Exception code: 0xc0000005
Fault offset: 0x00000000000f854a
It reproduces in a brand new blank workbook: type values into A1:A3, copy them, then paste into C1.
I was able to rule out the usual causes. It happens in a new blank workbook, so it is not file corruption. It happens under a freshly created Windows user account, so it is not the profile. It came straight back after a full reinstall of Office, because Windows Update reapplied the update. Word pastes normally on the same machine, so the Windows clipboard itself is fine. I see it on both Windows 10 22H2 and Windows 11 25H2, across several machines. Everything worked normally the day before the update installed.
The timing is unambiguous: the update installed on the morning of 9 September 2026 and the crashes started immediately.
Is this a known issue, and is a corrected update expected? I can provide a crash dump if that would help.