Apple's Version Editor help has only two subjects, "Comparing Versions of a File with the Timeline" and "Comparing Versions of a File with the Jump Bars" neither of which describes a way to back out or add particular changes to the current version of a file, or create a merge file from the pair being compared.
I can't find any controls, menu items, or context menu items that seem to be useful. The context item "Copy Source Changes" seemed promising, but what it does is fill the paste buffer with the diff script for the selected change. Pasting it into the other file does nothing useful, you simply end up with the diff script embedded in the file.
Lots of us found Apple's Filemerge to be kind of weird and counterintuitive, but at least it had a mechanism for choosing which changes to accept or decline in a final file.
And of course P4's merge tool is outlandishly sluggish and weird, but it too provided a merge mechanism.
Perhaps the question I should ask is "Is there a good way to do revision merges in an Xcode/Git workflow?"