> By saving the versions of the files we sent for revision (think of the main branch), I could receive the version from other parties (kind of like feature branches), turn on Word changes, paste the complete content of the original, and we could visualize the difference.

IANAL, but this was a key step for me as well. If you maintain copies of the versions sent out (and modified copies sent back), you can always get a clean diff of the copy sent out versus the copy sent back, or of an earlier version versus a subsequent revision.

The compare/combine tools in Word aren't great, but they are functional. Kind of like a local maximum, I suppose.