diff3: Fix merge mode.

This is mostly thj@'s work, with some tweaks and cleanup by me. There
are still some cases where our output differs from GNU diff3, but it's
much better than before and I'd rather commit what I have now than let
it continue to languish in a metaphorical drawer.

MFC after 3 weeks
Sponsored by: Klara, Inc.
Reviewed by: thj
Differential Revision: https://reviews.freebsd.org/D46762