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In this video tutorial, the host explains how to remove a watermark in Microsoft Word. Watermarks, such as "Draft," "Confidential," or "Sample," are often embedded in documents to indicate their status. To remove a watermark, instead of double-clicking on it (which does not work), users should navigate to the "Design" tab, click on the "Watermark" dropdown arrow, and select "Remove Watermark." This action effectively eliminates the watermark from the document.