> Due to our strict security protocols and the terms outlined in the Microsoft Services Agreement, we are unable to modify or restore the security settings once they've been updated.
and
> Additionally, if you had files stored in OneDrive, those files are no longer accessible. Due to encryption and privacy safeguards, even our engineers cannot retrieve them.
is actually some vague way of them saying that the person with unauthorized access enabled some setting in OneDrive that encrypts with secrets now only known to that attacker, and their policies disallowed them from storing any of the previous unencrypted data or a way to undo that encryption. i don't use OneDrive so i don't even know if that's possible