Microsoft is malware. https://gizmodo.com/microsoft-forced-copilot-into-your-life-now-it-can-accidentally-drain-your-bank-account-2000707721

Are there orgs or individuals refusing to work with external partners using Microsoft tools?

Really, this is true of Google as well, but/and while they both have terrible privacy practices, Microsoft pairs that bad practice with impressive levels of bad product decisions and technical ineptitude.