The ISOs from that tool come direct from Microsoft, so all good there, it's the easiest way of getting for example just Word or just Excel (or both) without the bloat of everything else.
KMS stands for key management server. It's what businesses use to activate their corporate versions of Office and Windows.
The 'hack' turns your device into a 'local KMS server', converts Office (and Windows if not licensed) into a corporate license version and activates it against the corporate keys (which Microsoft publish publicly) on the local device every 180 days. I've done this for multiple people in the past and it works like a charm. I beleive it even activates Server editions too. The only thing you need to do if you use an AntiVirus other than the Microsoft provided one is add the path of the file to your AV exceptions. If you use the built Microsoft AV, the script does it all for you. Run once and forget about it.
Appreciate these posts probably break the rules of the forum so if an admin needs to edit them )or at least the one with links to the tools) feel free, but all this stuff is easily found on the Internet if you google key words from the paragraph above!