MS Word document fails to convert to Google Docs

At work we use Google and store a lot of documents on the Drive. Up until now we’ve not had any issues with converting Word documents to Google Docs but recently all Word documents are being “mangled” during the conversion.

In this example I created a new file with the single word “Hello” in it; after uploading and opening as a Google Docs I get this:

Can anyone suggest how to fix this and/or explain why it’s happening?