This policy setting controls whether users can apply binary format digital signatures to Office 97-2003 documents.
If you enable this policy setting, Office 2016 applications use the Office 2003 binary format to apply digital signatures to Office 97-2003 binary documents so that they will be recognized by the Office 2003 release and earlier applications.
If you disable or do not configure this policy setting, Office 2016 applications use the XML--based XMLDSIG format to attach digital signatures to documents, including Office 97-2003 binary documents. XMLDSIG signatures are not recognized by Office 2003 applications or previous versions. If an Office 2003 user opens an Excel, PowerPoint, or Word binary document with an XMLDSIG signature attached, the signature will be lost.