I'll be honest, I don't know how to really answer this without doing some coding. Max's investigation says a lot: T231698#5512527. Since that time, the wikidiff2 output apparently includes section names with the relevant line numbers (T234096). This includes both the left side and the right side (see for example REST API output), which I think alleviates Max's performance concern. If I'm understanding things correctly, the work would be limited to MediaWiki's DifferenceEngine.php to make use of the section titles. I suppose system administrators can swap out the diff engine (MediaWki appears to use sebastianbergmann/diff by default), our changes will have to only show section titles if the engine provides this information.

I was wrong! The HTML output is generated by the C++ library. It doesn't look that bad to work with, though, and I think https://gerrit.wikimedia.org/r/c/mediawiki/php/wikidiff2/+/539906 will offer some clues. So:

Potential risks associated with this project from a technical perspective

• Our changes to the diff HTML might effect other places than just Special:Diff, such as Special:ComparePages (this is probably fine)
• Make sure the new functionality has no conflicts with Revision-Slider (it shouldn't)
• In updating the wikidiff2 library, only WMF wikis are guaranteed the new section title functionality. We could also optionally port this change to the MediaWiki diff engine for other wikis that use it.
• Since the code changes live outside of MediaWiki, we won't be able to control the display with a feature flag, or at least I think we'd need to do it through a INI flag rather than something in LocalSettings.php

Potential dependencies associated with this project from a technical perspective

• wikidiff2 PHP extension, with the HTML generator written in C++. There is a docker container available that may make this easier.

Recommendation for implementation of this change

• Get some of idea of what we want it to look like. This might effect where we need to make code changes and how difficult they will be.
• (Re-)learn some basic C++
• Try out the docker container and get that hooked up into your local MW installation.
• Try to go off of the patch that added section titles to the JSON, and do the same for the HTML output.
• Hopefully profit.

Rough estimate/sense of difficulty or effort required by this project

• Updating wikidiff2: medium, perhaps large if you include the learning curve.
• Updating the core diff engine (optional): large