Richard Stallman writes:
 >     I'm sure there's no good reason that it has to work the way it does.
 >     I think it just "seemed like a good idea at the time",  but as you say
 >     it isn't consistent with other modes.
 > 
 >     I can take a look into it in a couple of days.
 > 
 > That would be appreciated; thanks in advance.

I have made the changes so that command highlight-changes-mode simply
toggles the mode on and off, and so have introduced a new command
highlight-changes-toggle-visibility to toggle between what was
previously called active and passive modes.

At first I wasn't very happy with the changes, because now toggling
the main highlight changes mode loses information [the changes].
However, I now think it does seem a reasonable way of doing things.

A side effect of the new highlight-changes-toggle-visibility command
is that it enables highlight changes mode.  I was going to correct
this "bug" by making it only operate if the mode was active, but then
realized that the current behaviour is better.  People that wanted the
old method of one function to turn it on and toggle between active and
passive can basically just use the new command.

Attached is the new version;  please let me know what you think.

As well as the above change and some minor cleanup is a new command
highlight-compare-buffers that I think is occasionally useful.