Currently, torchlight diffs will make all tokens inside the diff either green or red

Rather, I wish the text could remain styled, and add/remove would only affect the background color of the lines.

The reason this might have been avoided is that some themes already color tokens red or green, so it could be hard to distinguish text from the background, without having theme-specific diff color overrides.
Maybe the solution could take inspiration from github or gitlab diff UIs

#2 highlighting individual words like github diffs might help too