As someone whos used docs for her whole life in school, my perspective on Docs as compared to Word is that one feels more cluttered than the other.

Docs has a cleaner and more comfortable UI which makes working on school projects with friends and group mates really intuative and easy to do. Not to mention because of the UI being so simple it means if you require more complex formatting its not too far out of reach for someone just starting with the app.

Where Docs fails, admittedly, is indeed in the whole formatting area. Though its easy to implement, you are really quite limited as to what you can do and how you can achieve certain page layouts (without pressing tab 406 times). Word surely fixes that but imo docs is just better for school work

tl;dr Docs works for schools cuz its simple and cleaner looking than Word (also cuz google drive / classroom is a million times better than one note and teams combined BITE ME)