Microsoft launched several new security features of Office 365 in early 2020, including application guarding. This feature is based on Hyper-V virtual technology, which can open untrusted documents in the sandbox to ensure system security.
Previously, Office could only open documents in read-only mode in ‘Protected View’, while the application guard function was to open documents in a virtualized sandbox, and users could still edit and print them.
These documents include documents from untrusted sites, documents stored in potentially unsafe folders or networks, and documents blocked by the ‘File Blocking Feature’.
The application guarding function is turned off by default, and the administrator will need to set the correct policy for each user in the organization. The feature is at present available in ‘Current Channel’ and ‘Monthly Enterprise Channel’, and the ‘Semi-Annual Enterprise Channel’ version is planned to be launched later this year.
(Source)