The above is true, but there are caveats. Under the hood, Office is constantly saving back to Sharepoint and trying to merge changes. If it can't merge changes it will simply alert the user and give the option of abandoning their changes or saving them locally for manual merge later.

In my experience, merging seems to fail more often with Excel and PowerPoint than Word, but even in Word applying doc-wide changes (e.g. change of language) while someone else edits usually fails.

For sequential editing it works fine and keeps an automatic version history.