When used as a stand-alone sentence, you're right:

1. Where should this car be parked? <-- correct

2. Where this car should be parked?

Now... if it's part of a larger sentence it's different:

1. Do you know where should this car be parked?

2. Do you know where this car should be parked? <-- correct

My version of MS word correctly responds to both of these examples. I would speculate that either there was some other typo that made MS Word think you were in the second scenario, or it was just a flat-out bug in the grammar checker.

When used as a stand-alone sentence, you're right:

1. Where should this car be parked? <-- correct

2. Where this car should be parked?

Now... if it's part of a larger sentence it's different:

1. Do you know where should this car be parked?

2. Do you know where this car should be parked? <-- correct

I would speculate that either there was some other typo that made MS Word think you were in the second scenario, or it was just a flat-out bug in the grammar checker.