The problem starts with high resolution input (more than default Screen Level of 96 dpi)
follow the sizes and we see at 100% Word has reduced the quality during import to 75% size (This is a common error in MS Edge too, where the opposite happens and page size is stated as upscaled to 133% mm compared to real units ! Once the image has been downscaled it is also down sampled to 96 DPI and that is used for export to PDF. Hence as suggested the only way to improve the PDF is replace with the original.
For the future since we know why, we can ensure the import is 96 dpi and then it stays that way.