See below:
[subbu@earth parsoid] echo '<div style="{{1x|color:red;}}%">foo</div>' > /tmp/wt
[subbu@earth parsoid] parse.js < /tmp/wt > /tmp/old.html
[subbu@earth parsoid] sed 's/foo/foo and bar/g;' < /tmp/old.html > /tmp/new.html
[subbu@earth parsoid] parse.js --selser --html2wt --oldtextfile /tmp/wt --oldhtmlfile /tmp/old.html < /tmp/new.html
<div style="{{1x|color:red;}}%">foo</div>
[subbu@earth parsoid] parse.js --html2wt < /tmp/new.html
<div style="{{1x|color:red;}}%">foo and bar</div>Looks like a problem with dom diff.