This update broke something that worked, and the error message is misleading. Users who rely on .xls files for legacy data, vendor reports, or archived records are now locked out of their own workflows with a message that suggests the file itself is the problem, when the real issue is a change Microsoft made on their end.
The user who reported this did the right thing. They tested on an older version (2601) where the same file loads fine. They tried the workarounds that get suggested in every forum: trust center settings, file properties, removing protections. None of it worked. That tells us this isn't about permissions or file security. It's about a deliberate deprecation that Microsoft chose not to communicate clearly. When a company stops supporting a format for security reasons, that's a defensible decision, but the error message should say "This format is no longer supported in this version," not "We can't load data from this source due to its type of protection." That distinction matters. It wastes hours of troubleshooting time and erodes trust.
For the working professional, this means one more undocumented breaking change to track. If your workflow depends on .xls files, whether from a legacy ERP system, a client's archived data, or a partner's export tool, you now have a deadline to convert those files or find a workaround. The immediate fix is to save the .xls files as .xlsx before loading them into Power Query, or to run the old version (2601) in parallel until you migrate. Neither is sustainable. This is a reminder that dependency on a single vendor's tool chain carries hidden costs. The format you rely on today can be revoked tomorrow with a patch note you never read.
The real takeaway here is not about one file format. It's about how much control users have over their own data pipelines. When a tool stops accepting a common format without warning, and then masks that change behind a security error, the user is left guessing instead of working. That's not an upgrade, it's a roadblock. If you're evaluating tools for data preparation, ask yourself whether they own your compatibility or you do. The answer will determine how many afternoons you spend on forums like this one.