While Word and Excel (and plenty of other kinds of non-cloud document) files usually contain data besides links, and sometimes contain no links, they can contain content which is non-obviously (from visual inspection) provided through a link which is broken if the file is moved. And, unlike gdocs, you don't usually get a warning when you drag them out of the folder which tells you exactly what is going to happen if you do that.
I would assume its the same Google Drive background process that syncs changes made to files in the folder back to Drive, just using special handling for the case of "you moved a file that is a link to content in a Google web service and rather than a normal file".
Edit: HDF5 is great for storing OT data too, even if the operations and handling are proprietary.