I am having the same issue.  We went through all of the steps of repairing the database, and  verifying versions.  I spent hours on the phone with QB support.  This was working until sometime in January.  We finally tried each of the versions of word we had licenses for: Office Home and Business 2021, 2019, and 2016.  When we got back to Office 2013, QB Generate Letters would work again.  QB would not generate Letters in any version after Office  2013.   We could edit the templates in any version but couldn't use them in versions after Office 2013.