They are all still in the file. iCloud exports one combined vcf holding all 700 contacts back to back, and the Outlook import wizard famously reads only the first entry of a multi contact vCard, then reports success. Two ways past it:

Drag route, no tools: open the Contacts view in Outlook, then drag the vcf from Explorer and drop it directly onto the contact list area. Dropped vCards process fully and all entries import into the folder. Since the folder belongs to your 365 account they sync up to the server and out to your other devices.

Split route if the drag misbehaves on your build: split the combined file into individual vcf files and batch import those. A small PowerShell loop splitting on the BEGIN:VCARD lines does it, as does any vCard splitter utility. Outlook's wizard then imports a folder of singles one by one.

Test with the drag first, it works on current Outlook builds and takes ten seconds. Verify the count afterwards in the folder's status bar against the 700 in iCloud, and switch your iPhone's default contacts account to the 365 account so new contacts stop accumulating on the iCloud side.