As reported by engadget,
“When you receive a Word document as an email attachment, you can open it and start editing in Docs with a single click while still preserving the Word file format,” Google explains. “Then you can respond to the original email thread and include the updated file, right from Docs—saving you time by eliminating steps like downloading the file to edit, or searching for the relevant email to reattach it to.”
The update is beginning to roll out now to Google Workspace, though the company notes it could take two weeks to appear to everyone. It’s not clear if the company also plans to offer the feature on the standard consumer version of Gmail.