this doesn't look useful.
the left one is just fine. for everything else you wouldn't need a cli diff tool...
imagine a for loop in which a variable (used on every line) was renamed, and buried in the loop an assignment changed slightly (eg, + became -). with a standard diff, it's really hard (for me) to pick up the minor change. with word by word diffs, it's pretty easy
(i use netbeans diff, not this tool, but they appear similar)
note: need to pipe it to "less -r"