I still have Word '97 and ran it. RTF wasn't even a choice and all the other normal choices/formats are gone. What's left are only the native formats... DOC, DOT & TXT.
I also vaguely remember having problems out of Wordpad's non-native formats after an install many years back.
I had problems copying and pasting into Word Perfect 2000 after the Microsoft VerCLSID update.
I have various other word processing programs installed including Microsoft Works (crap) and Open Office.
Many programs rely on plugins and the resulting issues were far more palletable back in the 3.1 days when install programs would commonly overwrite newer files with older revisions. Unfortunately problems sometimes manifest themselves in the reverse too, when older files are updated with newer ones especially when they have to be redesigned to differing standards as a result of exploits or functionality. Doesn't happen nearly as often as it used to though. Your problems with Word '97 were likely caused by a third-party install or O/S update.
The inter-dependencies aren't always clear (good example)
but it's the nature of windows. Without those inter-dependencies Windows or rather the programs that run on it would be twenty times slower (and notably larger) than they already are.