In this edit on Meta I have replaced left angle brackets with < entity. However, on the right side of the diff left angle brackets are still shown instead of <. "Show changes" during editing works as expected.
EDIT: It looks like it is a problem related to Firefox 104.0. Microsoft Edge 104.0.1293.70 and good ole Firefox 52.9.0 show the diff as expected.
EDIT 2: Everything is fine when I log out. So this is likely a problem with my set of gadgets.
Can you reproduce with safemode=1 when being logged in? https://www.mediawiki.org/wiki/Help:Locating_broken_scripts
No, i.e. when I add &safemode=1 to the URL, the diff looks as expected, when I remove it, left angle brackets are displayed instead of <. It must be a gadget. My common.js, global.js and global.css are virtually empty.
BTW, the problem exists when I log in using MS Edge.
I can reproduce this when enabling AutoLink on https://meta.wikimedia.org/wiki/Special:Preferences#mw-prefsection-gadgets which is located at https://meta.wikimedia.org/wiki/MediaWiki:Gadget-autolink.js which links to https://en.wikipedia.org/w/index.php?title=User:Lenore/autolink.js
Might be line 171 about &lt; to &shy;<&shy; and &gt; to &shy;>&shy;
Uh, and adding the common disclaimer here, though you might be aware (but other readers might not):
User scripts, gadgets, templates, custom CSS are local on-wiki content. Local content is managed independently on each wiki, by each wiki community themselves.
Phabricator is mostly used for MediaWiki, MediaWiki extensions, or server configuration, or by developers and teams to organize what they plan to work on.
This needs fixing on the local wiki. Hence I am closing this task here - thanks for your understanding!