You can think of the semantics (i.e., specification) of any CRDT as a function that inputs the operation history DAG and outputs the resulting user-facing state. However, algorithms and implementations usually have a more programmatic description, like "here is a function `(internal state, new operation) -> new internal state`", both for efficiency (update speed; storing less info than the full history) and because DAGs are hard to reason about. But you do see the function-of-history approach in the paper "Pure Operation-Based Replicated Data Types" [1].

[1] https://arxiv.org/abs/1710.04469

Yes.

There are many ways to instantiate a CRDT, and a trivial one would be "last write wins" over the whole source tree state. LWW is obviously not what you'd want for source version control. It is "correct" per its own definition, but it is not useful.

Anyone saying "CRDTs solve this" without elaborating on the specifics of their CRDT is not saying very much at all.