ODT is the native document format for LibreOffice and OpenOffice, built on the open OpenDocument standard, and it plays essentially the same structural role for those programs that DOCX plays for Microsoft Word. Neither format is inherently better at the core job of storing a formatted document — the practical choice mostly comes down to what software the people you're actually sharing with have installed.
Both are modern, XML-based formats
Like DOCX, ODT is built on an XML-based structure (specifically the OpenDocument Format standard) rather than an older proprietary binary layout, which means it shares many of the same general advantages — reasonably efficient compression, a documented and open structure, and support for the kind of modern formatting features (styles, tables, embedded images, tracked changes) that DOCX also supports. Feature-for-feature, ODT and DOCX are genuinely comparable in what they're each capable of representing.
Where compatibility differences actually show up
Microsoft Word can open ODT files, and LibreOffice/OpenOffice can open DOCX files, so cross-compatibility isn't a hard wall in either direction — but the conversion isn't always perfect. Certain more complex formatting, specific advanced features, or particular styling choices occasionally shift slightly when a document moves between the two formats via either program's built-in compatibility layer, similar to how any format conversion between two feature-rich systems can introduce small discrepancies at the edges.
Why DOCX remains the more common default
Microsoft Word's broader overall market presence means DOCX is more frequently the format people default to and the one most commonly expected in professional and business contexts, largely for that reason rather than any inherent technical superiority over ODT. This is mostly an installed-base and convention effect — the format itself isn't doing anything ODT structurally can't also do.
Why ODT remains a genuinely solid choice in some contexts
For anyone using LibreOffice or OpenOffice as their primary word processor, ODT is the natural native format, avoiding the occasional formatting quirks that can come from working primarily in a non-native format. ODT is also specifically favored in some contexts that prioritize open-standard, non-proprietary document formats as a matter of principle — certain government agencies, educational institutions, and organizations with open-standards policies use ODT for exactly that reason.
A practical way to decide
If you're working primarily in LibreOffice or OpenOffice, ODT as your native format avoids unnecessary compatibility-layer conversions. If you're sharing a document with someone you know uses Microsoft Word, or working in a context where DOCX is the clear convention, saving in DOCX directly avoids relying on either program's cross-format compatibility layer to get the conversion exactly right. When you're not sure what the recipient uses, DOCX remains the more broadly expected default simply due to Word's wider general adoption.
Regardless of which word processor format you're starting from, Word to PDF handles converting either ODT or DOCX into a fixed, universally viewable PDF once the document is finished and ready to share as a final version.