Text: document current vs. saved version

With the “text” app, sometimes I get the message:

The document has been changed outside of the editor. The changes cannot be applied.

I think I got it most recently by editing a Markdown file in the Notes app, then editing it again shortly after in the default Markdown text editor (I think that app is just called “text”).

I’m confused about the two buttons that show up at the bottom of the page during this conflicted state:

Use current version

Use the saved version

What are these two distinct versions?

The differences are also pretty hard to spot visually, except for a very small document. Is there some way to highlight the differences, or download both versions and compare them with other tools?

See also: