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In this tutorial, the video explains how to remove a watermark in Microsoft Word. It illustrates that watermarks, such as "Draft," "Confidential," or "Urgent," may appear on documents received for editing. To eliminate a watermark after finalizing the document, the common method of double-clicking the watermark will not work. Instead, users should navigate to the "Design" tab, click on the watermark dropdown arrow, and select "Remove Watermark." This action successfully removes the watermark from the document.