Codex Diff fail to pin down the exact lines that are changed

What version of the IDE extension are you using?

26.409.20454

What subscription do you have?

Plus

Which IDE are you using?

VS Code

What platform is your computer?

Microsoft Windows NT 10.0.26200.0 x64

What issue are you seeing?

When codex is used to make some modifications, the Codex Diff is all messed up. Some lines are "changed" into the exact same line, causing the diff to be practically unreadable.
Example:

...
- line a unchanged
- line b unchanged
- line c unchanged
- line d old
- line e unchanged
+ line a unchanged
+ line b unchanged
+ line c unchanged
+ line d new
+ line e unchanged
...

What steps can reproduce the bug?

Just make codex edit some files and take a look at the codex diff.

What is the expected behavior?

Only the actual modified lines should appear in the diff view.
Running Example

...
line a
line b
line c
- line d old
+ line d new
line e
...

Additional information

_No response_