The most likely cause of the file being replaced by a file with a ".QUARANTINE.txt" extension containing a policy violation notice is that the original file was flagged as a potential security threat by an automated security system or antivirus software.
When a security system or antivirus software detects a potential threat in a file, it may automatically quarantine the file by renaming it with a ".QUARANTINE" extension and replacing the original file with a notice explaining the policy violation. This is done to protect the user and the system from potential harm.
In this case, it's possible that the original REPORT.docx file contained a virus, malware, or other security threat that triggered the automated security system to quarantine it. It's important for the incident to be investigated further to determine the exact cause and take appropriate actions to prevent such incidents from occurring in the future.