Compare between MR versions doesn't work

Summary

For the last few days, the compare with previous version feature (and other comparisons, i.e. between commits) is not working properly. The product is effectively unable to provide diff of iterative changes (i.e. after code review).

Steps to reproduce

1. Create a new MR from a branch with some commit in it.
2. Update the branch multiple times by amending the existing commit.
3. Click on the link compare with the previous version.
4. Instead of seeing the diff between versions 3 and 4, you see the diff between the base branch and version 4.

What is the current bug behavior?

The displayed file changes are not the comparison that was asked for. Note that the changes are shown correctly in terms of line numbers, but it does not match the file's content.

What is the expected correct behavior?

Show diff between the requested versions.

Note that there is no known workaround, i.e. I can't go and use the compare commits feature, the problem is reproduced there as well.