Currently, tig has no support for color-words in diffs. In fact, starting tig wit the --color-words option fails with "No revisions match the given argument" (which is quite misleading as error message).

This should probably be consiered a long-term TODO, as it requires some heavy-duty re-engineering of the diff view, especially with respect to highlighting. Also, color-word support would require massaging the input parameters, since the word-diff option should always be turned into 'porcelain'.