Does this issue occur when all extensions are disabled?: Yes

• VS Code Version: 1.94.2
• OS Version: Windows 10 22H2 19045.4894

Steps to Reproduce:

When using the VS Code Merge Editor to resolve conflicts in a file when merging an unrelated branch using git merge --allow-unrelated-histories <branch>, the complete incoming and current content of the file are shown as conflicting, event if there are identical blocks in the two versions. Therefore, it's not possible to accept either the incoming or current version block by block.

However, in the default merge conflict view, identical blocks are recognized and it is possible to choose between the incoming and current version block by block.

Also, once the Merge editor was opened to resolve the conflicts in a file when merging an unrelated branch, the default merge conflict view is empty when opening it again.