Solution: Open the terminal (use spotlight to find it quickly), and paste these two commands in, one at a time, hitting return after each:
- killall "Microsoft Database Daemon"
launchctl unload ~/Library/LaunchAgents/com.microsoft.LaunchAgent.SyncServicesAgent.plist
... then go back to the installer and try again.
For those who care, the problem here is that even if you go into Activity Monitor and quit the Sync Services Agent process, our good friend "launchd" notices that it died and restarts it.
I'm a little soft on whether unloading it actually quits the Sync Services Agent process -- it seemed to, but I don't know why. I'm also not sure whether I should be re-"load"-ing the job with launchctl -- after the Office update installed, the Sync Services Agent was relaunched somehow, so maybe Office just launched it.
Anyway hope that helps someone.
ps. Having worked in a big company, my guess is that the last person who truly understood the entire design of the Office suite from install to test is long gone, and we're left with myriads of people who only understand pieces of it. As they work on the parts, those parts grow increasingly incompatible with the other parts, and we're left with something that starts looking like a Frankenstein product. That's my theory, anyway.