The apr_file* based diff code in libsvn_diff limits the compared line length to
4096 characters.
In some specific cases when lines are different but only after this character
range we miss the difference, which breaks the file merge code.
It is not easy to fix this issue without introducing a slightly higher
arbitrary limit in the current design. This issue should be fixed when we move
to a stream based diff.
See also:
http://ankhsvn.open.collab.net/issues/show_bug.cgi?id=603
for the original report. (It was discussed on #svn-dev after the
issue was added there.