Another reason to use LaTeX for papers back in the day was that Microsoft Word would routinely corrupt large documents in terrifying ways. Sometimes the root of the corruption existed in the document somehow long before any of it was visible, so even recovering from an old backup would just lead to the problem repeating. I recall the only way to properly "recover" an old backup was to copy it all via plain text (e.g. Notepad), and then back into a brand new Word document.
This is all to say, if you're working on a theis or even a moderately large assignment, working in Word was not good for the nerves.
Looking back, I probably should have just worked in plain text and then worried about formatting only at the very end, but ummm, yes, I guess another hapless victim did indeed fall into LaTeX's trap. :)
I’ve run into this exact issue several times with group projects at university in the 2010s, and each time recovery was copying chunks of plain text from backup copies into new documents as you say. Luckily by the time we got to the final year capstone project the whole group was happy to go with LaTeX. Not sure if these Word issues have even been fixed since.
I don't have a source for this, so take it with a huge grain of salt... but for some reason I have a memory of someone telling me that the older versions of Word saved and loaded documents by writing the bytes of in-memory data structures directly to files on disk, with not much in the way of marshalling or validation in the middle. Because it was fast, or something. You can imagine the kind of edge cases and oopsies that might result.
The new versions at least serialise to some kind of monstrous XML representation of Word's internal state, so while it's not going to win any awards for world's most elegant document format, it should be slightly harder to corrupt in subtle ways.