diff --git a/packages/core/src/utils/__tests__/html-diff.test.js b/packages/core/src/utils/__tests__/html-diff.test.js
index 9e3c39c52..49582bad5 100644
--- a/packages/core/src/utils/__tests__/html-diff.test.js
+++ b/packages/core/src/utils/__tests__/html-diff.test.js
@@ -26,28 +26,44 @@ const equalPairs = [
     `<div>hello   \n\n\n\n\n</div>\n\n\n\n\n\n`,
     `<div>hello</div>`
   ],
-  ["ignore html structure", `<p><b>hello</b>world</p>`, "<p>helloworld</p>"],
   [
-    "ignore attributes",
-    `<p id="ignored"><b id="ignored">hello</b>world</p>`,
-    "<p>helloworld</p>"
+    "ignore non-semantic attributes",
+    `<p id="ignored" class="one" data-extra="x">hello world</p>`,
+    `<p>hello world</p>`
   ],
   [
-    "ignore empty tags",
-    "<div>helloworld</div><p></p>",
-    "<div>helloworld</div>"
+    "same formatting preserved",
+    `<p><strong>hello</strong> world</p>`,
+    `<p><strong>hello</strong> world</p>`
   ],
-  ["ignore br", "<p>hello<br/>world</p><p><br/><br/></p>", "<p>helloworld</p>"],
+  [
+    "same list structure",
+    `<ul><li><p>item one</p></li><li><p>item two</p></li></ul>`,
+    `<ul><li><p>item one</p></li><li><p>item two</p></li></ul>`
+  ],
+  [
+    "ignore trailing empty paragraph",
+    `<div>helloworld</div><p></p>`,
+    `<div>helloworld</div>`
+  ],
+  [
+    "ignore tiptap empty paragraph placeholder",
+    `<div>helloworld</div><p><br/></p>`,
+    `<div>helloworld</div>`
+  ],
+  ["ignore deeply nested empty tags", `<ul><li></li></ul>`, ``],
   [
     "image with same src",
     `<img src="./img.jpeg" />`,
     `<img id="hello" class="diff" src="./img.jpeg" />`
   ],
   [
-    "link with same href",
-    `<a href="google.com" />`,
-    `<a id="hello" class="diff" href="google.com" />`
-  ]
+    "link with same href and text",
+    `<a href="google.com">click here</a>`,
+    `<a id="hello" class="diff" href="google.com">click here</a>`
+  ],
+  ["case insensitive tags", `<P>hello</P>`, `<p>hello</p>`],
+  ["whitespace inside semantic tags", `<p>hello   \n\n</p>`, `<p>hello</p>`]
 ];
 
 describe("pairs should be equal", () => {
@@ -72,7 +88,57 @@ const inequalPairs = [
     `<a href="brave.com" />`,
     `<a id="hello" class="diff" href="google.com" />`
   ],
-  ["non-string", {}, {}]
+  ["non-string", {}, {}],
+  // formatting differences
+  ["bold vs no bold", `<p><b>hello</b>world</p>`, `<p>helloworld</p>`],
+  ["bold vs italic", `<p><strong>hello</strong></p>`, `<p><em>hello</em></p>`],
+  ["strikethrough vs underline", `<p><s>hello</s></p>`, `<p><u>hello</u></p>`],
+  ["code vs plain text", `<p><code>hello</code></p>`, `<p>hello</p>`],
+  // structural differences
+  ["heading vs paragraph", `<h1>Title</h1>`, `<p>Title</p>`],
+  ["different heading level", `<h1>Title</h1>`, `<h2>Title</h2>`],
+  [
+    "ordered vs unordered list",
+    `<ul><li>item</li></ul>`,
+    `<ol><li>item</li></ol>`
+  ],
+  [
+    "list item reordering",
+    `<ol><li><p>first</p></li><li><p>second</p></li></ol>`,
+    `<ol><li><p>second</p></li><li><p>first</p></li></ol>`
+  ],
+  [
+    "blockquote vs paragraph",
+    `<blockquote><p>quoted</p></blockquote>`,
+    `<p>quoted</p>`
+  ],
+  [
+    "br creates structural difference via text splitting",
+    `<p>hello<br/>world</p>`,
+    `<p>helloworld</p>`
+  ],
+  [
+    "hr is a meaningful structural element",
+    `<p>above</p><hr/><p>below</p>`,
+    `<p>above</p><p>below</p>`
+  ],
+  // separator prevents text-node concatenation collisions
+  [
+    "adjacent paragraphs do not collide with single paragraph",
+    `<p>foo</p><p>bar</p>`,
+    `<p>foobar</p>`
+  ],
+  [
+    "href value does not collide with adjacent text",
+    `<a href="abc">def</a>ghi`,
+    `<p>abcdef</p><a href="">ghi</a>`
+  ],
+  // link text difference
+  [
+    "link text changed with same href",
+    `<a href="google.com">click here</a>`,
+    `<a href="google.com">go there</a>`
+  ]
 ];
 
 describe("pairs should not be equal", () => {
diff --git a/packages/core/src/utils/html-diff.ts b/packages/core/src/utils/html-diff.ts
index 3d03771c3..d706192fb 100644
--- a/packages/core/src/utils/html-diff.ts
+++ b/packages/core/src/utils/html-diff.ts
@@ -21,30 +21,113 @@ import { Parser } from "htmlparser2";
 
 const ALLOWED_ATTRIBUTES = ["href", "src", "data-hash"];
 
+// Tags whose presence, absence, or nesting order constitutes a semantic
+// difference — tracked as tokens so structural/formatting changes are detected.
+const SEMANTIC_TAGS = new Set([
+  // block structure
+  "p",
+  "h1",
+  "h2",
+  "h3",
+  "h4",
+  "h5",
+  "h6",
+  "blockquote",
+  "pre",
+  "ul",
+  "ol",
+  "li",
+  "table",
+  "tr",
+  "td",
+  "th",
+  "thead",
+  "tbody",
+  "hr",
+  // inline formatting
+  "strong",
+  "b",
+  "em",
+  "i",
+  "u",
+  "s",
+  "del",
+  "mark",
+  "sup",
+  "sub",
+  "code",
+  "a"
+]);
+
+// Void elements cannot have children. We emit only an open token for them so
+// empty-pair removal never accidentally strips them (e.g. <hr> is meaningful).
+// <br> is intentionally absent from SEMANTIC_TAGS altogether: it is a void
+// element used as an empty-paragraph placeholder in TipTap, and meaningful
+// line breaks are already detectable via separate text node tokens.
+const VOID_ELEMENTS = new Set(["hr"]);
+
 export function isHTMLEqual(one: unknown, two: unknown) {
   if (typeof one !== "string" || typeof two !== "string") return false;
 
   return toDiffable(one) === toDiffable(two);
 }
 
+/**
+ * Repeatedly removes adjacent open/close pairs that have no content between
+ * them, e.g. ["<p>", "</p>"] → []. Iterates until stable so that nested
+ * empty tags collapse fully: <ul><li></li></ul> → [].
+ */
+function removeEmptyTagPairs(tokens: string[]): string[] {
+  let prevLength = -1;
+  while (tokens.length !== prevLength) {
+    prevLength = tokens.length;
+    const result: string[] = [];
+    let i = 0;
+    while (i < tokens.length) {
+      if (
+        i + 1 < tokens.length &&
+        tokens[i][0] === "<" &&
+        tokens[i][1] !== "/" &&
+        tokens[i + 1] === `</${tokens[i].slice(1)}`
+      ) {
+        i += 2; // skip the empty pair
+      } else {
+        result.push(tokens[i]);
+        i++;
+      }
+    }
+    tokens = result;
+  }
+  return tokens;
+}
+
 function toDiffable(html: string) {
-  let text = "";
+  const tokens: string[] = [];
   const parser = new Parser(
     {
-      ontext: (data) => (text += data.trim()),
-      onopentag: (_name, attr) => {
+      ontext: (data) => {
+        const trimmed = data.trim();
+        if (trimmed) tokens.push(trimmed);
+      },
+      onopentag: (name, attr) => {
+        if (SEMANTIC_TAGS.has(name)) tokens.push(`<${name}>`);
         for (const key of ALLOWED_ATTRIBUTES) {
           const value = attr[key];
           if (!value) continue;
-          text += value.trim();
+          tokens.push(value.trim());
         }
+      },
+      onclosetag: (name) => {
+        // Void elements never have children so their close token would always
+        // form an empty pair and be stripped — skip it entirely.
+        if (VOID_ELEMENTS.has(name)) return;
+        if (SEMANTIC_TAGS.has(name)) tokens.push(`</${name}>`);
       }
     },
-    {
-      lowerCaseTags: false
-      // parseAttributes: true
-    }
+    { lowerCaseTags: true }
   );
   parser.end(html);
-  return text;
+  // \x00 is used as separator — it cannot appear in HTML content, so
+  // "foo" + "bar" in separate nodes can never collide with "foobar" in one.
+  return removeEmptyTagPairs(tokens).join("\x00");
 }