I’ve decided to go with opening in SharePoint instead of working just with the documents, because more file types can be included this way. The one we use a lot is Microsoft Project, which you can’t open in Teams, only download. Opening it in SharePoint, however, allows you to see the previous versions.
The other thing is that the whole Microsoft version control process is still, well, clunky. For example, if you use the “Compare” feature shown below and then try to restore the file without closing all the other versions in other windows, Teams will tell you that you can’t restore because the file is locked for editing.
Also, it’s tempting to try and edit the comparison document. I haven’t figured out, however, how to save that back as a version of the original file. You’re welcome to experiment, but don’t do it if you’re in a hurry.
Here’s the video. Enjoy.