Thanks to Bram Senders <bram@luon.net> for reporting this.
Notice the obvious wrongness in the diff labels of the second invocation:
$ svn diff -rPREV:BASE README
Index: README
===================================================================
--- README (revision 10382)
+++ README (working copy)
@@ -146,8 +146,8 @@
[...]
$ svn diff -rBASE:PREV README
Index: README
===================================================================
--- README (revision 10382)
+++ README (working copy)
@@ -146,8 +146,8 @@
[...]