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In this video tutorial, the speaker demonstrates how to remove a watermark in Microsoft Word. Watermarks, such as "Draft," "Confidential," and "Urgent," indicate the document's status. After finishing work on a document, users may wish to eliminate the watermark. The video explains that double-clicking the watermark won't make it selectable for removal. Instead, to successfully remove the watermark, go to the "Design" tab, click on the watermark drop-down arrow, and select "Remove Watermark." Once this step is completed, the watermark is eliminated from the document.