(Again, rich text doesn’t need a binary file format but you ignored that)

Word’s Track Changes literally does this - you can compare/merge/etc. Quark also had extensions in the 90s that allowed it. It’s entirely feasible for any binary format (assuming you understand the format); why wouldn’t it be?

And it makes a lot of sense from a business standpoint, eg for lawyers, which is why they implemented it. Is it as rich as git? No, the use-case is different. Could it be? Yes.

I’m going to leave “power and freedom” where they lie and go marvel at the awesome power of the “Italic” and “Table” buttons from Word 5.1.