Difference on circle very inaccurate if circle is in group that is shrunk down a lot

Steps to reproduce:

• Open Flag_of_Russia4.svg in Inkscape
• Keeping in the same layer, draw a circle
• duplicate and move duplicate up (holding Ctrl to make sure it is perfectly vertical)
• Select both circles and do a path Difference operation

What happened?

Incorrect circle cut. For one thing, you can see the two top edges of the cutout are not the same height

This seems to happen because the outer group contains a transform that shrinks the shapes a lot (transform="matrix(0.000326552 0 0 0.000326552 3.13531 0.700004)").

Strangely, removing the transform by ungroup (so the transform in applied) or manually deleting the transform (so the transform is not applied, and the shape grows in size) makes the path difference work nicely.

Before	After

What should have happened?

Cutout as if from a new document.

Example svg: Flag_of_Russia4.svg

Version info

• Inkscape 1.2 (dc2aedaf03, 2022-05-15)