I was looking at the revisions of a question, and it occurred to me that there are unclosed
<em> tags in the HTML code that cause a large portion of the text to be italic (namely, from somewhere in point 3's code to the end of the post).
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We have improved the revision diff algorithm.
We're currently testing it here on Meta; once we're certain there are no problems, it will go out to the other sites as well. Your example was one of those I tested, and it is handled correctly by the new version.