The first is basically a rather complicated workflow that is handled for instance with plain text documents in git. I doubt Word can do that (wouldn't know, haven't used it for a long time), after all it's core thing is being a word processor.
Now I didn't read your rant, but ranting that something is a pile of junk and then using a rather far-fecthed missing feature as an example of why it is a pile of junk, as a counter-argument to someone questioning your reasoning, is not proper logic. Can't think of a proper analogy atm, but claiming git is a pile of junk and then coming up with git diff not being able to deal with Word files as one of the reasons would probably come close: it makes no sense.