diff -c0 reports change instead of deleted

[Allen Tupker]

Binary package hint: diff

Using Ubuntu 7.04
version reported with apt-cache policy diff
diff:
  Installed: 2.8.1-11ubuntu4

When the command diff -c0 A B is used to compare the two separate text
files (with contents listed below), shouldn't diff report the test2 line
as "deleted" by preceding it with a minus sign in the diff output?
Instead diff reports the test2 line as a changed line by preceding it
with an exclamation point in the diff output. This behavior is triggered
by having the line "This is a test3" contain a change in file B. Diff
functions as expected if the test3 line is the same in file A and B. 
I have also seen this behavior in a recent but unknown release of
Redhat.

file A
This is a test1
This is a test2
This is a test3
This is a test4

file B
This is a test1
This is a test33
This is a test4

diff -c0 A B

*** A 2008-05-08 22:46:27.000000000 -0500
--- B 2008-05-08 22:46:55.000000000 -0500
***************
*** 2,3 ****
! This is a test2
! This is a test3
--- 2 ----
! This is a test33