That’s exactly the problem; Google Docs’ use case is only “share a basic document and collaborate on the words.”
It’s not capable of creating precise or maintainable documents (e.g. no styles as others have mentioned), which is a very common need that it’s adjacent enough to that lots of people use it for and then it fails.
What is a style? Are you trying to create a poster or do some graphic design? Some weird xml style sheet thing? Yes it’s not for that, but then also doing that in libre office or word also sounds horrible and unmaintainable.
To define a custom style in a word processing context means to define "a group of settings that I can apply at will to parts of the text".
That is, I should be able to define a "Code block" style that should appear in the same dropdown where google docs lets you select heading levels. When I select that "Code block" style, the app should format the selected bit of text according to the syte's definition. For instance: use a monospace typeface, apply some margins to this paragraph and paint a gray background on it.
Likewise, I should be able to update the style definition and all code blocks should update accordingly.
This is very basic functionality that has existed in word processors since... forever. Large and/or more complex documents are simply much much more painful to maintain/evolve without this feature.
To add on to your well laid out points, many companies have "house styles" embedded into their templates that allow a consistent look and feel. GDocs lack of support for these makes it a non-starter.
