[tcbyrd]

The integration mentions working with Microsoft Graph API, and it’s doing the generation on the client, so seems plausible this has no more access than any other OAuth app. The Graph API can be locked down with Access Policies. I’m sure there will be features to further cordon off data to the AI, similar to how OneDrive has an encrypted vault which is not accessible from the Graph API.

[Rimintil]

OneDrive for Business does not have an encrypted vault (though the files are stored encrypted at rest/in transit).

As far as 'no more access than', OAuth apps can have full control over your tenant and all data.