In the edit experience I am using, the LLM provides a git style changelog where I can easily compare before/after with a really detailed diff. I find that much more useful than giant "blobs" of code where minor differences crop up that I don't notice.
The other massive drawback to the out-of-codebase chatbot experience (and the Edit With Copilot experience IS a chatbot, it's just integrated into the editor, changes files with diffs, and has a UI for managing file context) is context. I can effortlessly load all my open files into the LLM context with 1 click. The out-of-editor chatbox requires either a totally custom LLM with various layers to handle your codebase context, or you have to manually paste in a lot of context. It's nonsense to waste time pasting proprietary code into OpenAI (with no business agreement other than a privacy policy and a checkbox) when I can get Copilot to sign a BA with strict rules about privacy and storage, and then 1-click add my open files to my context.
Folks should give these new experiences a try. Having claude chatbot integrated into your editor with the ability to see and modify your open files in a collaborative chat experience is very nice.