I can't say I've really had many issues with git diffs or conflicting classes. I'm not entirely sure why you'd replace blanket `p-4` all over your app. Are you making some changes to the spacing in your design system? Why not change it globally and let it propagate?
I'd tend to agree with you that (S)CSS modules are a great improvement over the completely detached styling of the past, but I still think Tailwind has a lot to offer with its prebaked system and dead code elimination.