I have reported a bug and entered a support request at the KDiff3 site (https://sourceforge.net/p/kdiff3/bugs/198/), but I wonder if anyone has any prompt information for me about a behavior I'm seeing that might lead me to understanding why such a bug might exist -- if there's anything unusual about these unicode characters.
When I merge two identical files containing the character 稍 using KDiff3 version 0.9.98, it reads the character as 稊 and shows that character in all the panes of the merge. The output then contains that character instead of 稍.
I've observed this behavior with UCS-2 Little Endian encoding in version 0.9.98 of KDiff3, but not with UTF-8 encoding, and not with version 0.9.96a the version of Kdiff3 that comes with TortoiseHg. Although I can reproduce the problem in 0.9.96 and 0.9.97, TortoiseHg's KDiff3 reports that it is version 0.9.96a, and does not exhibit the problem.
Edit: I vaguely suspect the source of the problem to be somewhere in the Qt library. So any information about what Qt does especially in regard to handling international text might be useful.