I think this is more to do with natural morphism than theological changes. But what do I know, I just play the notes.
You’re correct. When my wife and I were planning our wedding at the local Catholic cathedral, I was happily surprised to stumble across it in the hymnal. The slight shift in wording was not based on substance; but merely a result of differing translation (translating is a difficult art - especially when it requires maintaining a rhyme scheme, proper syllabic count, and avoiding existing copyrights!). We considered it as a hymn for our wedding, but when the organist found a raucous organ version, we thought the more celebratory tune would fit best as a recessional/postlude. The priest got a kick out of it.
Anyway, if you ask me, the traditional Lutheran translation rolls off the tongue just a tad easier – especially verse 2.
Catholic:
Did we in our own strength confide, our striving would be losing,
Were not the right Man on our side, the Man of God’s own choosing.
Dost ask who that may be? Christ Jesus, it is He –
Lord Sabaoth His name, from age to age the same –
And He must win the battle.
Lutheran:
With might of ours can naught be done, soon were our loss effected;
But for us fights the Valiant One, whom God Himself elected.
Ask ye, who is this? Jesus Christ it is.
Of Sabbath Lord, and there’s none other God;
He holds the field forever.