The word "grace" tends to emphasize God's mercy, whereas the term "underserved kindness" emphasises that humans are not worthy.
When you gain broader perspective it becomes apparent that JWs are not a very God oriented religion.
Yes, this exactly. "Grace" has a more positive connotation, more uplifting in tone. "Undeserved kindness" has a far more negative connotation to it, reinforcing a feeling of worthlessness. It's understandable why the WT has stuck with it for so long. It's really a microcosm of the entire tone of the religion: You can never do enough, you can never be good enough, and you maybe (probably) won't survive the big A anyway.
It's a good example of the weird, schizophrenic take JWs have on salvation, simultaneously rejecting "once saved, always saved" and the notion of simple faith leading to salvation (as in most mainstream evangelical groups), and rejecting the notion that works can lead to salvation. When everything in the religion is setup to make you work for your "salvation".