That doesn't sound like soft or hard wrapping, though, that sounds like semantic wrapping, which is a separate concept entirely. With semantic wrapping you put each sentence (or similar) on a new line, which helps with diffing. But if that sentence runs over e.g. 80 characters, you still need to decide whether you're going to hard wrap or soft wrap that sentence. And in the inverse direction, if you don't do semantic wrapping, you'll have similar issues with diffs regardless of whether you use hard wraps or soft wraps.
So I think that's a good argument for doing semantic wrapping of code and text (I guess semantic wrapping for code is just not writing everything in one long line separated by semicolons), but once you've put in semantic line breaks, you still need to decide how to handle text that spans multiple lines.
So I think that's a good argument for doing semantic wrapping of code and text (I guess semantic wrapping for code is just not writing everything in one long line separated by semicolons), but once you've put in semantic line breaks, you still need to decide how to handle text that spans multiple lines.