The files do get saved however they overwrite files in the current remote directory rather than the remote directory they were loaded from.

WinSCP sync remote with preview
CTRL+ALT+SHIFT+C to compare (Winmerge opens)
Copy changes to right
Close WinMerge
Confirm save
File is saved to the current open directory (from where synchronize was from)

index.html
|---index.html

So saving the nested file will overwrite the top level file.

Ok, we will see, if more people ask for this.

So it seems synchronization, in the current implementation, is for file-level changes. For line-level changes, the explorer view is the way to go.

Perhaps "saving line-level changes in synchronization checklist" is worthy of an RFE? This would allow both file- and line-level changes in the same workflow.

Indeed, the files are not saved. That's how it works.

Version:
WinSCP 6.3.2 on Windows 10 22H2
Protocol:
SFTP
Steps:

1. Synchronize (Direction: Remote)
   
2. Compare a file (external comparison tools: WinMerge)
   
3. Copy some changes from Local file to Remote file
   
4. Save Remote file
   

Expected:
Remote file saved with some changes from Local file.
Actual result:
Remote file not changed – as if nothing has happened.

Saving changes in WinMerge works when comparing files outside of the Synchronization checklist, e.g. in the explorer UI.