German typewriters generally had dedicated keys for the umlauts.
Windows however does offer a "English (international with dead keys)" keyboard layout that turns :, `, ^, etc into dead keys. Word offering the same at another level of abstraction sounds like a typical Microsoft thing
If it's the English international keyboard variant that I'm familiar with on either Windows or Linux, it's not : that is turned into a dead key but "
(Itś pretty annoying to write with if youŕe typing english, I can recommend toggling the keyboard layout (Alt+Shift in Windows by default) whenever you switch languages)