This issue is about a gap between FSFS spec and implementation. Generalized rep sharing in 1.8 made that gap visible but it has always been there.
No data is being lost and checkout etc. should work. However, dump files generated from the affected repos will not load. There are 2 places in mod_dav_svn that call svn_fs_file_length() and might not result in mere cosmetic problems. Can someone please check what happens when those falsely get file length 0? The issue is fixed on /trunk, backport branches for 1.7 and 1.8 will be available soon. -- Stefan^2.