And the little folding button does indeed fold all nine lines.
When I instead try [a,b,c,1,2,3,x,y,z] against [a,b,c,1,2,3,a,b,c] it only shows "Number of differences: 3 differences from 3 lines of code." and folds the first 6 and the last 3 lines.
The reason why it changes output after using square braces is because the tool is language aware. Before it could not guess at a programming language and so the input is text parsed into lines. After the language detection guesses this is JSON format and formally parses the input, beautifies it, and then compares the beautified output.
I already realize that if I am going to the trouble of parsing languages that it would be far more efficient to simply compare the parsed token lists instead of beautified text, but I haven't gotten there yet.
File 1,
a
b
c
1
2
3
x
y
z
x
y
z
1
2
3
a
b
c
Code type is set to auto. Presumed language is unknown.
Execution time: 0.013 seconds
Number of differences: 9 differences from 9 lines of code.