Well Steve Maser asked me to come up with a version that would work recursively on all files inside a folder you would drag to the script.
He also suggested that I added the W6BN type (for Word 6/95 files).
So I based the script on one of the examples provided by Apple, and here is the result:

-- This droplet processes files dropped onto the applet
on open these_items
   repeat with i from 1 to the count of these_items
      set this_item to item i of these_items
      set the item_info to info for this_item
      if folder of the item_info is true then
         process_folder(this_item)
      else
         tell application "Finder"
            
            -- get the file type
            set TheFileType to file type of this_item
            set UpdatedFileType to TheFileType
            
            -- detect old file types for Office files chose the correct one instead
            if TheFileType = "WDBN" then set UpdatedFileType to "W8BN"
            if TheFileType = "W6BN" then set UpdatedFileType to "W8BN"
            if TheFileType = "XLS4" then set UpdatedFileType to "XLS8"
            --   if TheFileType = "SLD8" then set UpdatedFileType to "SLD8"
            
            -- set the new file type
            set file type of this_item to UpdatedFileType
         end tell
      end if
   end repeat
end open
-- Just in case people try to open the script through a double-click in the Finder.
on run
   display dialog "Drop your files or folders to be converted on this icon"
end run

The compiled script is here and again, please make tests only on a copy of your files.
Feedbacks are much welcome.