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So basically, you will not help unless I spend $450 for one professional license and one developer license?  (the dev site is on a different domain, not a subdomain of the live site)

>>All properties are working perfectly as described in the documentation.

Believe me, I have been poring through any documentation I could find.

This works, the styles are merged:
$docx->importStyles($docroot.'/includes/REV_styles.docx', $type= 'merge',
     array('BookTitle',
             'BookChapter',
             'VerseHeading',
             'VerseHeadingMicro',
             'SectionHeading',
             'BlockQuote',
             'FootNote'));

This does not work, the styles are not imported and the PHPDOCX styles are not replaced:
$docx->importStyles($docroot.'/includes/REV_styles.docx', $type= 'replace');

And when the styles are merged successfully, and I do this:

$docx->embedHTML($html, array('strictWordStyles' => true,
'wordStyles' => array('<h2>' => 'BookTitle',
                               '<h3>' => 'BookChapter',
                               '.verseheading' => 'VerseHeading',
                               '.verseheadingmicro' => 'VerseHeadingMicro',
                               '.sectionheading' => 'SectionHeading',
                               '.blockquote' => 'BlockQuote',
                               '.footnote' => 'FootNote'
                               )));
 

If $html has <div class="blockquote">some text</div> the BlockQuote style is NOT applied.

If $html has <p class="blockquote">some text</p> the BlockQuote style IS applied.

The imported styles are only applied to classed <p> tags.

Anyway, thanks for the help you did provide.