The ability to specify a sharing link that prohibits the recipient downloading the file has started to roll out and has appeared in my tenant. Note that this will appear first for files shared with Specific People and will gradually roll out to support other apps that support the Office 365 sharing experience eg Explorer, Office etc. It would make sense that the tenant admin could specify this as default behaviour but I see no sign of this.
This is a great way to prevent the proliferation of multiple copies of a file, or at least make it more difficult, enforcing the one master copy approach.
If you Block Download then the Allow Editing option is disabled – as below ..
