Comment by soraminazuki

The feature that was broken is called persistent undo. The docs unambiguously state that edit history will be preserved unless Vim/Neovim detects that the "undo file is no longer synchronized with the file it was written for."

https://neovim.io/doc/user/undo/#_5.-undo-persistence

So even putting aside the Vim/Neovim interoperability angle, that contract was broken. Undo files created by old versions of Neovim will be deleted by more recent versions.

The interoperability issue can't be ignored either. Neovim was touted as a drop-in Vim replacement, and that needs to be taken into account when considering how changes affect users.

So many Neovim users have started by reusing their existing vimrc. I'm sure many still have ~/.config/nvim/init.vim symlinked to ~/.vimrc to this very day. With Vim, persistent undo is opt-in. Vim users who cared enough to opt in are highly likely to have explicitly set the path for undo files too. That's because Vim defaults it to the same directory as the file being edited, which clutters the filesystem. As a result, there are many users who shares undo files between Vim and Neovim simply because they reused their vimrc, not because they made the conscious choice to do so.