vimdiff noob question

I am following the example in the vim user manual: 08.7 Viewing differences with vimdiff
My vimdiff is either broken or I am not understanding something.

In this example, a.txt has serveral lines of text.
I open vimdiff from the command prompt:
vim -d a.txt~ a.txt
~
~
~
~
vimdiff displays both files as having no lines, and there are no folds.
Is this how vimdiff is supposed to work? I was expecting to see some text.
If I save the file (:w) at this point, the file is overwritten with an empty file.
Otherwise vimdiff seems to work normally; I am able to insert text into a.txt and save it.

This is my first attempt learning vimdiff and I appreciate your advice.
Thank you.

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