render empty nested containers as attributes

Don't try to break down containers that are empty to render the diff, so
we can avoid having to check for empty vs null in all cases.

internal/command/format/diff.go

@@ -471,8 +471,28 @@ func (p *blockBodyDiffPrinter) writeAttrDiff(name string, attrS *configschema.At
 	}
 
 	if attrS.NestedType != nil {
-		p.writeNestedAttrDiff(name, attrS.NestedType, old, new, nameLen, indent, path, action, showJustNew)
-		return false
+		renderNested := true
+
+		// If the collection values are empty or null, we render them as single attributes
+		switch attrS.NestedType.Nesting {
+		case configschema.NestingList, configschema.NestingSet, configschema.NestingMap:
+			var oldLen, newLen int
+			if !old.IsNull() && old.IsKnown() {
+				oldLen = old.LengthInt()
+			}
+			if !new.IsNull() && new.IsKnown() {
+				newLen = new.LengthInt()
+			}
+
+			if oldLen+newLen == 0 {
+				renderNested = false
+			}
+		}
+
+		if renderNested {
+			p.writeNestedAttrDiff(name, attrS.NestedType, old, new, nameLen, indent, path, action, showJustNew)
+			return false
+		}
 	}
 
 	p.buf.WriteString("\n")
@@ -613,6 +633,7 @@ func (p *blockBodyDiffPrinter) writeNestedAttrDiff(
 		allItems := make([]cty.Value, 0, len(oldItems)+len(newItems))
 		allItems = append(allItems, oldItems...)
 		allItems = append(allItems, newItems...)
+
 		all := cty.SetVal(allItems)
 
 		p.buf.WriteString(" = [")

internal/command/format/diff_test.go

@@ -2861,6 +2861,41 @@ func TestResourceChange_nestedSet(t *testing.T) {
           - volume_type = "gp2" -> null
         }
     }
+`,
+		},
+		"in-place update - empty nested sets": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-BEFORE"),
+				"disks": cty.NullVal(cty.Set(cty.Object(map[string]cty.Type{
+					"mount_point": cty.String,
+					"size":        cty.String,
+				}))),
+				"root_block_device": cty.SetValEmpty(cty.Object(map[string]cty.Type{
+					"volume_type": cty.String,
+				})),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.SetValEmpty(cty.Object(map[string]cty.Type{
+					"mount_point": cty.String,
+					"size":        cty.String,
+				})),
+				"root_block_device": cty.SetValEmpty(cty.Object(map[string]cty.Type{
+					"volume_type": cty.String,
+				})),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchema(configschema.NestingSet),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+      + disks = []
+        id    = "i-02ae66f368e8518a9"
+    }
 `,
 		},
 	}