I'm so sorry, please ignore, I made a mistake in understanding how diff highlights colors. I guess I was thinking of `hg diff` and the like, and my coworkers had also thought this seemed wrong.
Apologies.
Hello! I'd like to report a bug. I'm running version "diff (GNU diffutils) 3.6, Copyright (C) 2017 Free Software Foundation, Inc.". When I run it with --color=always and -C1, the wrong lines are highlighted: it highlights the lines that _would have_ been the line numbers of output if no context was enabled, but since there are extra lines of output, it's highlighting the wrong lines.
Best,
Alex Meiburg