There are many tutorials available how to create papers and even dissertation projects with the help of LaTeX. What these manuals have in common is that they don't explain in detail why LaTeX is the better choice over word. It most cases the argument is the rendering quality of LaTeX is much higher because of better internal algorithm. To understand what does it mean in detail we have read existing dissertation documents and analyze how the documents are formatted.
What dissertation documents have in common no matter which software was used to create them is, that all of them are formatted with the justified layout. This formatting style is so obvious and so frequently used and has such a long tradition that it isn't mentioned explicit. The typical dissertation is formatted in a symmetric way. That means, the title headline is of couse formatted as center text, and the main body text is also formatted as center text. But for the main body the left and right edge is forming a straight line this is called by typographers a fully justified text.
It depends on the author how exactly this style was realized. A common option is to use the MS-Word software, disable the hyphenation feature and then format the entire text fully justified. The result is that between the words many empty spaces are visible.
Another option used by word authors is to activate the hyphenation feature first and then the rendered justified text has smaller amount of empty space. And exactly this situation is the reason why LaTeX is recommended as a word replacement. Because the LaTeX word wrapping algorithm is able to reduce the empty spaces further. The same text looks with LaTeX different, because LaTeX is using an optimized word wrap algorithm, and very important the microtype package. So the result has much in common with the output of the indesign software which is also able to create high quality text.
So what LaTeX is doing is simple: it creates fully justified text with the help of hyphenation and intelligent word wrapping so that the amount of white spaces is minimized. This ability is labeled by the LaTeX community has high quality output.
So let us go a step back ward and ask a simple question: why exactly is a dissertation formatted as fully justified text, what is about flush left formatting style? No body knows. Even the question is so extraordinary that it is hard to answer it. Basically spoken the paradigm is, that the only allowed formatting style is symmetric, in a way that the headline is centered and that longer texts are formatted fully justified.
This kind of rule is much bigger than the LaTeX community. The rule is valid for other programs like indesign and MS-word as well. The rule is also valid for dissertations written before the advent of the PC. So it is has to do with typesetting in general.
From a technical point of view the LaTeX software can produce better justified text than MS-Word. THis is not a subjective interpretation but a 1:1 comparison will show it. In contrast the difference between LaTeX and indesign is little, both are able to create optimized justified text. The open question is if fully justification in general makes sense. Is there a need to produce centric / symetric documents?
In the history there are two main exceptions from this rule available. Letter are usually created in flush left and the internet based HTML pages are also formatted in flush left. Everything else especially books, journals and dissertations are typesetted in the justified mode.
Perhaps it makes sense to explain the situation from a more positive perspective. A typical introduction into the LaTeX software starts with a direct comparison with MS-Word. On the left side the document is shown formatted with Word and on the right side the same is formatted with LaTeX. Of course the LaTeX rendered pdf documents looks better because the text density is higher. It has little or no white spaces and the page looks similar to a printed book. Because of this ability of LaTeX to generate high quality output, the software is used frequently for academic purposes.
What is not answered in this comparison is the problem of formatting in general. The untold assumption was that both examples (word and latex) have to format the paragraph in the fully justified mode. In this restricted domain, LaTeX is much better. IF the paragraph setting was changed to flush left the result is the same.