It's the kind of UI experimentation I like to see people try, but I'm not sure they nailed this one.
Probably onto something though. Try different diacritical symbols and see what sticks. Given how '"' looks, maybe combining above or below needs to vary by character. Above probably looks awful for '.' and ','.
Really I think the strikethrough might suffice. The only way to know for sure is to take away the color highlighting, so my brain doesn't use it as a crutch, and see if people can still read the diff.
I think it's really cool as well. Although, it does start to look a little wonky with quotes and probably some other characters and makes skimming a bit harder. Maybe monospaced fonts will start to handle this better if it gets popular?