See the lost newline there before the transclusion. This is being flagged as a semantic RT diff in a lot of pages artificially inflating our RT-testing failures.

[subbu@earth lib] echo "a\n\n\n{{echo|b\n<div>c</div>}}" | node parse --wt2wt
a

{{echo|b
<div>c</div>}}

Seems to be because of the paragraph wrapper pulling that newline into the transclusion. See the <br/> that has ended up in the template output. There doesn't seem to be a nice fix for this since what the p-wrapper is doing seems to be right.

[subbu@earth lib] echo "a\n\n\n{{echo|b\n<div>c</div>}}" | node parse --normalize=parsoid

<p>a</p>
<p typeof="mw:Transclusion" data-mw='{"parts":["\n",{"template":{"target":{"wt":"echo","href":"./Template:Echo"},"params":{"1":{"wt":"b\n&lt;div>c&lt;/div>"}},"i":0}}]}'><br/> b</p>
<div>c</div>