If I remember correctly, I double-clicked the workflow to open it, clicked file > Convert To, then clicked Folder Action.
In the resulting window, I clicked the “Choose folder” drop-down menu and selected “Other,” navigated to my Desktop and in the resulting window clicked New Folder.
When I put .doc files into the folder, Word converted them to .docx format.
As an alternative, I can recommend Doxillion: https://www.nchsoftware.com/documentconvert/index.html.
It works. I’ve been using it to convert both ancient files and more recent ones as part of my strategy to ensure future readability of my family history materials.