The error in the log is
<Error>
<Code>NotImplemented</Code>
<Message>A header you provided implies functionality that is not implemented</Message>
<Key>emptyFile</Key>
<BucketName>ms-files</BucketName>
<Resource>/ms-files/emptyFile</Resource><RequestId>167CD02BDA0E0869</RequestId>
<HostId>7050e9ff-e26f-4aa7-a51e-c3af7be3f888</HostId></Error>
Note that rclone uses a different PUT method to most s3 tools (for complicated reasons to do with missing interfaces in the SDK). It looks like this
2021/05/07 17:47:32 DEBUG : PUT /ms-files/emptyFile?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=BzNIlPY1ODBQZbBLB9%2F20210507%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20210507T144732Z&X-Amz-Expires=900&X-Amz-SignedHeaders=content-md5%3Bcontent-type%3Bhost%3Bx-amz-acl%3Bx-amz-meta-mtime%3Bx-amz-server-side-encryption%3Bx-amz-server-side-encryption-aws-kms-key-id&X-Amz-Signature=7967266f20eaaccb2f41c5373dd6291355538d5f200836643f9091a078938a21 HTTP/1.1
Host: store.server.name
User-Agent: rclone/v1.55.1
Content-Length: 0
content-md5: 1B2M2Y8AsgTpgAmY7PhCfg==
content-type: application/octet-stream
x-amz-acl: private
x-amz-meta-mtime: 1620398807.249955783
x-amz-server-side-encryption: AES256
x-amz-server-side-encryption-aws-kms-key-id: XXX
Accept-Encoding: gzip
All of those are pretty standard, except for the x-amz-server-side-encryption ones.
Can you try a put without those to see if it works (comment out server_side_encryption = AES256) in the config file.