An incrementing u64 requires either atomic increments between concurrent clients or recalculation logic to consistently find the newly incremented ID after conflicting information syncs. UUIDs just spit out a unique ID without any complexity or associations with other clients.
There's closely related idea that might work, though. Each device editing text could be assigned a 32-bit ID by the server (perhaps auto-incrementing). Devices then maintain a separate 32-bit ID that they increment for each operation they perform. The ID used for each character is (device_id, edit_id), which should fit nicely in 8 bytes.
Indeed, this is close to what Yjs (popular CRDT library) does: each client instance (~ browser tab) chooses a random 32-bit clientId, and character IDs combine this clientId with local counters. https://github.com/yjs/yjs/blob/987c9ebb5ad0a2a89a0230f3a0c6...
Any given collaborative document will probably only see ~1k clientIds in its lifetime, so the odds of a collision are fairly low, though I'd be more comfortable with a 64-bit ID.