Git has something similar if you turn on the "diff3" conflict style, and I can't for the life of me understand why it's not on by default, because there are many situations where you just don't have enough information to properly resolve a merge without it.
zdiff3 is NOT "better", it's a matter of personal preference. it moves common lines out of the conflicted hunks, which may be highly confusing. some people use it anyway
If you ask on / search the history of the mailing list, you'll see that in complex merges with synthetic intermediate parents it can produce some really gnarly output, which is the main reason why (coupled with git's general conservatism).