`dvc diff <rev>` reports all-deleted/0-added for outputs after splitting a single-dir `.dvc` into per-subfolder `.dvc` files (3.66.1)

Description

After refactoring a single dir-output .dvc (e.g. review.dvc tracking review/) into multiple sub-folder .dvc files (review/<name>.dvc, each with path: <name> relative to its parent), dvc diff HEAD (i.e. HEAD vs workspace) reports every file under the refactored subtree as deleted, with 0 added and 0 modified, even though:

• dvc status reports the workspace fully in sync.
• The files all exist on disk at the expected paths.
• The dir-hash .dir cache files referenced by each new .dvc are present and enumerate correctly.
• HEAD's .dvc files are byte-identical to workspace's .dvc files (git status clean).
• dvc diff HEAD HEAD (rev-to-rev) is correctly empty.
• dvc diff HEAD~1 HEAD (other rev-to-rev pairings) work correctly.
• dvc diff HEAD --targets <unaffected-subtree> works correctly.

The zero-added/zero-modified counts suggest the workspace-side enumeration is returning an empty file list for the refactored outputs, while the HEAD-side enumeration correctly expands the dir caches; the diff then attributes all HEAD-side files to "deleted."

Reproduction

Pre-refactor state:

project/
  review.dvc            # outs: [{path: review, md5: <dir-hash>}]
  review/
    after_cma_phase1/
    clinician_files/
    ...

Refactor (each commit does one):

# Remove the umbrella tracker, leaving files in place
dvc remove review.dvc
git rm review.dvc

# Track each subfolder individually
dvc add review/after_cma_phase1
dvc add review/clinician_files
dvc add review/edf_files
# ...
git add review/*.dvc
git commit

Each new review/<name>.dvc looks like:

```yaml outs:

• md5: 69c24de62577c8e011842eaaa013ffc6.dir size: 1195692789 nfiles: 140 hash: md5 path: after_cma_phase1 ```

Then:

```bash $ dvc status Data and pipelines are up to date.

$ dvc diff HEAD HEAD

(empty, as expected)

$ dvc diff HEAD HEAD~1

(correct diff for the actual rev-to-rev change)

$ dvc diff HEAD --json | jq '{added, deleted, modified} | map_values(length)' { "added": 0, "deleted": 11957, "modified": 0 } ```

All 11,957 "deleted" paths still exist on disk and are correctly listed inside their respective .dir cache files.

Things tried that did not help

• dvc commit -f (no-op since dvc status is clean).
• Running dvc diff HEAD from the subdirectory containing the refactored .dvc files.
• Verifying every .dir cache file for each new sub-folder .dvc is present and well-formed.

Workarounds

• dvc status for sync checks (authoritative; not affected).
• Use commit-to-commit dvc diff <rev1> <rev2> (not affected).
• Scope HEAD-vs-workspace diffs to unaffected targets: dvc diff HEAD --targets <other-target> (not affected).

Expected behavior

dvc diff HEAD with no workspace changes should report an empty diff, matching dvc status.

Environment

``` DVC version: 3.66.1 (brew) CPython 3.14.2 Linux 6.18.28-1-lts (x86_64) glibc 2.43 ```

Repo layout: monorepo, DVC project lives in a subdirectory of the git repo (git toplevel and DVC root are not the same path). Remote: local FS path remote.