Excel 365 refers to the subscription version of Excel as opposed to fixed versions of Excel like Excel 2019, Excel 2016, etc.
Typically, the subscription version of Excel is available as part of a suite of applications called "Office 365", which was renamed "Microsoft 365" in 2020. You can see subscription status by navigating to File > Account, which shows current product information.
The subscription version of Excel is still downloaded and launched like a normal application on Windows and Mac OS. The key thing to understand is that Excel 365 may have new features that will not be available in any other version of Excel. A good example is Dynamic Array Formulas, which includes new functions like FILTER, UNIQUE, SORT, SORTBY, SEQUENCE, RANDARRAY, XMATCH, and XLOOKUP.
Note: Excel 365 should not be confused with "Excel Online" or "Office Online". These are limited feature applications that run in a browser.