diff --git a/internal/command/format/diff.go b/internal/command/format/diff.go
index 63157b5f1959..0f812f5cb167 100644
--- a/internal/command/format/diff.go
+++ b/internal/command/format/diff.go
@@ -310,7 +310,7 @@ func (p *blockBodyDiffPrinter) writeBlockBodyDiff(schema *configschema.Block, ol
 			if result.skippedBlocks == 1 {
 				noun = "block"
 			}
-			p.buf.WriteString("\n")
+			p.buf.WriteString("\n\n")
 			p.buf.WriteString(strings.Repeat(" ", indent+2))
 			p.buf.WriteString(fmt.Sprintf(p.color.Color("[dark_gray]# (%d unchanged %s hidden)[reset]"), result.skippedBlocks, noun))
 		}
@@ -326,8 +326,6 @@ func (p *blockBodyDiffPrinter) writeAttrsDiff(
 	path cty.Path,
 	result *blockBodyDiffResult) bool {
 
-	blankBeforeBlocks := false
-
 	attrNames := make([]string, 0, len(attrsS))
 	displayAttrNames := make(map[string]string, len(attrsS))
 	attrNameLen := 0
@@ -349,8 +347,8 @@ func (p *blockBodyDiffPrinter) writeAttrsDiff(
 		}
 	}
 	sort.Strings(attrNames)
-	if len(attrNames) > 0 {
-		blankBeforeBlocks = true
+	if len(attrNames) == 0 {
+		return false
 	}
 
 	for _, name := range attrNames {
@@ -365,7 +363,7 @@ func (p *blockBodyDiffPrinter) writeAttrsDiff(
 		}
 	}
 
-	return blankBeforeBlocks
+	return true
 }
 
 // getPlanActionAndShow returns the action value
@@ -754,10 +752,7 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 			action = plans.Update
 		}
 
-		if blankBefore {
-			p.buf.WriteRune('\n')
-		}
-		skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, old, new, indent, path)
+		skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, old, new, indent, blankBefore, path)
 		if skipped {
 			return 1
 		}
@@ -790,10 +785,7 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 			commonLen = len(newItems)
 		}
 
-		if blankBefore && (len(oldItems) > 0 || len(newItems) > 0) {
-			p.buf.WriteRune('\n')
-		}
-
+		blankBeforeInner := blankBefore
 		for i := 0; i < commonLen; i++ {
 			path := append(path, cty.IndexStep{Key: cty.NumberIntVal(int64(i))})
 			oldItem := oldItems[i]
@@ -802,27 +794,33 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 			if oldItem.RawEquals(newItem) {
 				action = plans.NoOp
 			}
-			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, oldItem, newItem, indent, path)
+			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, oldItem, newItem, indent, blankBeforeInner, path)
 			if skipped {
 				skippedBlocks++
+			} else {
+				blankBeforeInner = false
 			}
 		}
 		for i := commonLen; i < len(oldItems); i++ {
 			path := append(path, cty.IndexStep{Key: cty.NumberIntVal(int64(i))})
 			oldItem := oldItems[i]
 			newItem := cty.NullVal(oldItem.Type())
-			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, plans.Delete, oldItem, newItem, indent, path)
+			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, plans.Delete, oldItem, newItem, indent, blankBeforeInner, path)
 			if skipped {
 				skippedBlocks++
+			} else {
+				blankBeforeInner = false
 			}
 		}
 		for i := commonLen; i < len(newItems); i++ {
 			path := append(path, cty.IndexStep{Key: cty.NumberIntVal(int64(i))})
 			newItem := newItems[i]
 			oldItem := cty.NullVal(newItem.Type())
-			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, plans.Create, oldItem, newItem, indent, path)
+			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, plans.Create, oldItem, newItem, indent, blankBeforeInner, path)
 			if skipped {
 				skippedBlocks++
+			} else {
+				blankBeforeInner = false
 			}
 		}
 	case configschema.NestingSet:
@@ -845,10 +843,7 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 		allItems = append(allItems, newItems...)
 		all := cty.SetVal(allItems)
 
-		if blankBefore {
-			p.buf.WriteRune('\n')
-		}
-
+		blankBeforeInner := blankBefore
 		for it := all.ElementIterator(); it.Next(); {
 			_, val := it.Element()
 			var action plans.Action
@@ -871,9 +866,11 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 				newValue = val
 			}
 			path := append(path, cty.IndexStep{Key: val})
-			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, oldValue, newValue, indent, path)
+			skipped := p.writeNestedBlockDiff(name, nil, &blockS.Block, action, oldValue, newValue, indent, blankBeforeInner, path)
 			if skipped {
 				skippedBlocks++
+			} else {
+				blankBeforeInner = false
 			}
 		}
 
@@ -904,10 +901,7 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 		}
 		sort.Strings(allKeysOrder)
 
-		if blankBefore {
-			p.buf.WriteRune('\n')
-		}
-
+		blankBeforeInner := blankBefore
 		for _, k := range allKeysOrder {
 			var action plans.Action
 			oldValue := oldItems[k]
@@ -926,9 +920,11 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 			}
 
 			path := append(path, cty.IndexStep{Key: cty.StringVal(k)})
-			skipped := p.writeNestedBlockDiff(name, &k, &blockS.Block, action, oldValue, newValue, indent, path)
+			skipped := p.writeNestedBlockDiff(name, &k, &blockS.Block, action, oldValue, newValue, indent, blankBeforeInner, path)
 			if skipped {
 				skippedBlocks++
+			} else {
+				blankBeforeInner = false
 			}
 		}
 	}
@@ -974,11 +970,15 @@ func (p *blockBodyDiffPrinter) writeSensitiveNestedBlockDiff(name string, old, n
 	p.buf.WriteString("}")
 }
 
-func (p *blockBodyDiffPrinter) writeNestedBlockDiff(name string, label *string, blockS *configschema.Block, action plans.Action, old, new cty.Value, indent int, path cty.Path) bool {
+func (p *blockBodyDiffPrinter) writeNestedBlockDiff(name string, label *string, blockS *configschema.Block, action plans.Action, old, new cty.Value, indent int, blankBefore bool, path cty.Path) bool {
 	if action == plans.NoOp && !p.verbose {
 		return true
 	}
 
+	if blankBefore {
+		p.buf.WriteRune('\n')
+	}
+
 	p.buf.WriteString("\n")
 	p.buf.WriteString(strings.Repeat(" ", indent))
 	p.writeActionSymbol(action)
diff --git a/internal/command/format/diff_test.go b/internal/command/format/diff_test.go
index 8f8ebfad6e81..56e2eafeafed 100644
--- a/internal/command/format/diff_test.go
+++ b/internal/command/format/diff_test.go
@@ -3744,14 +3744,571 @@ func TestResourceChange_nestedMap(t *testing.T) {
           + new_field   = "new_value"
           + volume_type = "gp2"
         }
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"force-new update (whole block)": {
+			Action:       plans.DeleteThenCreate,
+			ActionReason: plans.ResourceInstanceReplaceBecauseCannotUpdate,
+			Mode:         addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-BEFORE"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("standard"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("100GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("different"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("standard"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(cty.Path{
+				cty.GetAttrStep{Name: "root_block_device"},
+				cty.IndexStep{Key: cty.StringVal("a")},
+			},
+				cty.Path{cty.GetAttrStep{Name: "disks"}},
+			),
+			Schema: testSchema(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example must be replaced
+-/+ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+      ~ disks = {
+          ~ "disk_a" = { # forces replacement
+              ~ size        = "50GB" -> "100GB"
+                # (1 unchanged attribute hidden)
+            },
+        }
+        id    = "i-02ae66f368e8518a9"
+
+      ~ root_block_device "a" { # forces replacement
+          ~ volume_type = "gp2" -> "different"
+        }
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"in-place update - deletion": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapValEmpty(cty.Object(map[string]cty.Type{
+					"mount_point": cty.String,
+					"size":        cty.String,
+				})),
+				"root_block_device": cty.MapValEmpty(cty.Object(map[string]cty.Type{
+					"volume_type": cty.String,
+					"new_field":   cty.String,
+				})),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaPlus(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+      ~ disks = {
+          - "disk_a" = {
+              - mount_point = "/var/diska" -> null
+              - size        = "50GB" -> null
+            },
+        }
+        id    = "i-02ae66f368e8518a9"
+
+      - root_block_device "a" {
+          - new_field   = "new_value" -> null
+          - volume_type = "gp2" -> null
+        }
+    }
+`,
+		},
+		"in-place update - unknown": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.UnknownVal(cty.Map(cty.Object(map[string]cty.Type{
+					"mount_point": cty.String,
+					"size":        cty.String,
+				}))),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaPlus(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+      ~ disks = {
+          - "disk_a" = {
+              - mount_point = "/var/diska" -> null
+              - size        = "50GB" -> null
+            },
+        } -> (known after apply)
+        id    = "i-02ae66f368e8518a9"
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"in-place update - insertion sensitive": {
+			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.MapValEmpty(cty.Object(map[string]cty.Type{
+					"mount_point": cty.String,
+					"size":        cty.String,
+				})),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+			}),
+			AfterValMarks: []cty.PathValueMarks{
+				{
+					Path: cty.Path{cty.GetAttrStep{Name: "disks"},
+						cty.IndexStep{Key: cty.StringVal("disk_a")},
+						cty.GetAttrStep{Name: "mount_point"},
+					},
+					Marks: cty.NewValueMarks(marks.Sensitive),
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaPlus(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+      ~ disks = {
+          + "disk_a" = {
+              + mount_point = (sensitive)
+              + size        = "50GB"
+            },
+        }
+        id    = "i-02ae66f368e8518a9"
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"in-place update - multiple unchanged blocks": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchema(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+        # (2 unchanged blocks hidden)
+    }
+`,
+		},
+		"in-place update - multiple blocks first changed": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchema(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+      ~ root_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"in-place update - multiple blocks second changed": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchema(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+      ~ root_block_device "a" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
+        # (1 unchanged block hidden)
+    }
+`,
+		},
+		"in-place update - multiple blocks changed": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchema(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+      ~ root_block_device "a" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+      ~ root_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+    }
+`,
+		},
+		"in-place update - multiple different unchanged blocks": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+        # (2 unchanged blocks hidden)
+    }
+`,
+		},
+		"in-place update - multiple different blocks first changed": {
+			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.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-AFTER"),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
+			}),
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+      ~ ami   = "ami-BEFORE" -> "ami-AFTER"
+        id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
+
+      ~ leaf_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
         # (1 unchanged block hidden)
     }
 `,
 		},
-		"force-new update (whole block)": {
-			Action:       plans.DeleteThenCreate,
-			ActionReason: plans.ResourceInstanceReplaceBecauseCannotUpdate,
-			Mode:         addrs.ManagedResourceMode,
+		"in-place update - multiple different blocks second changed": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
 			Before: cty.ObjectVal(map[string]cty.Value{
 				"id":  cty.StringVal("i-02ae66f368e8518a9"),
 				"ami": cty.StringVal("ami-BEFORE"),
@@ -3765,8 +4322,10 @@ func TestResourceChange_nestedMap(t *testing.T) {
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
 					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
 					"b": cty.ObjectVal(map[string]cty.Value{
-						"volume_type": cty.StringVal("standard"),
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
@@ -3776,44 +4335,37 @@ func TestResourceChange_nestedMap(t *testing.T) {
 				"disks": cty.MapVal(map[string]cty.Value{
 					"disk_a": cty.ObjectVal(map[string]cty.Value{
 						"mount_point": cty.StringVal("/var/diska"),
-						"size":        cty.StringVal("100GB"),
+						"size":        cty.StringVal("50GB"),
 					}),
 				}),
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
-						"volume_type": cty.StringVal("different"),
+						"volume_type": cty.StringVal("gp3"),
 					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
 					"b": cty.ObjectVal(map[string]cty.Value{
-						"volume_type": cty.StringVal("standard"),
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
-			RequiredReplace: cty.NewPathSet(cty.Path{
-				cty.GetAttrStep{Name: "root_block_device"},
-				cty.IndexStep{Key: cty.StringVal("a")},
-			},
-				cty.Path{cty.GetAttrStep{Name: "disks"}},
-			),
-			Schema: testSchema(configschema.NestingMap),
-			ExpectedOutput: `  # test_instance.example must be replaced
--/+ resource "test_instance" "example" {
+			RequiredReplace: cty.NewPathSet(),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
       ~ ami   = "ami-BEFORE" -> "ami-AFTER"
-      ~ disks = {
-          ~ "disk_a" = { # forces replacement
-              ~ size        = "50GB" -> "100GB"
-                # (1 unchanged attribute hidden)
-            },
-        }
         id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
 
-      ~ root_block_device "a" { # forces replacement
-          ~ volume_type = "gp2" -> "different"
+      ~ root_block_device "a" {
+          ~ volume_type = "gp2" -> "gp3"
         }
+
         # (1 unchanged block hidden)
     }
 `,
 		},
-		"in-place update - deletion": {
+		"in-place update - multiple different blocks changed": {
 			Action: plans.Update,
 			Mode:   addrs.ManagedResourceMode,
 			Before: cty.ObjectVal(map[string]cty.Value{
@@ -3828,43 +4380,53 @@ func TestResourceChange_nestedMap(t *testing.T) {
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
-						"new_field":   cty.StringVal("new_value"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
 			After: cty.ObjectVal(map[string]cty.Value{
 				"id":  cty.StringVal("i-02ae66f368e8518a9"),
 				"ami": cty.StringVal("ami-AFTER"),
-				"disks": cty.MapValEmpty(cty.Object(map[string]cty.Type{
-					"mount_point": cty.String,
-					"size":        cty.String,
-				})),
-				"root_block_device": cty.MapValEmpty(cty.Object(map[string]cty.Type{
-					"volume_type": cty.String,
-					"new_field":   cty.String,
-				})),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
+				"root_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
 			}),
 			RequiredReplace: cty.NewPathSet(),
-			Schema:          testSchemaPlus(configschema.NestingMap),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
 			ExpectedOutput: `  # test_instance.example will be updated in-place
   ~ resource "test_instance" "example" {
       ~ ami   = "ami-BEFORE" -> "ami-AFTER"
-      ~ disks = {
-          - "disk_a" = {
-              - mount_point = "/var/diska" -> null
-              - size        = "50GB" -> null
-            },
-        }
         id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
 
-      - root_block_device "a" {
-          - new_field   = "new_value" -> null
-          - volume_type = "gp2" -> null
+      ~ leaf_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
+      ~ root_block_device "a" {
+          ~ volume_type = "gp2" -> "gp3"
         }
     }
 `,
 		},
-		"in-place update - unknown": {
+		"in-place update - mixed blocks unchanged": {
 			Action: plans.Update,
 			Mode:   addrs.ManagedResourceMode,
 			Before: cty.ObjectVal(map[string]cty.Value{
@@ -3879,55 +4441,84 @@ func TestResourceChange_nestedMap(t *testing.T) {
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
-						"new_field":   cty.StringVal("new_value"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
 			After: cty.ObjectVal(map[string]cty.Value{
 				"id":  cty.StringVal("i-02ae66f368e8518a9"),
 				"ami": cty.StringVal("ami-AFTER"),
-				"disks": cty.UnknownVal(cty.Map(cty.Object(map[string]cty.Type{
-					"mount_point": cty.String,
-					"size":        cty.String,
-				}))),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
-						"new_field":   cty.StringVal("new_value"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
 			RequiredReplace: cty.NewPathSet(),
-			Schema:          testSchemaPlus(configschema.NestingMap),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
 			ExpectedOutput: `  # test_instance.example will be updated in-place
   ~ resource "test_instance" "example" {
       ~ ami   = "ami-BEFORE" -> "ami-AFTER"
-      ~ disks = {
-          - "disk_a" = {
-              - mount_point = "/var/diska" -> null
-              - size        = "50GB" -> null
-            },
-        } -> (known after apply)
         id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
 
-        # (1 unchanged block hidden)
+        # (4 unchanged blocks hidden)
     }
 `,
 		},
-		"in-place update - insertion sensitive": {
+		"in-place update - mixed blocks changed": {
 			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.MapValEmpty(cty.Object(map[string]cty.Type{
-					"mount_point": cty.String,
-					"size":        cty.String,
-				})),
+				"disks": cty.MapVal(map[string]cty.Value{
+					"disk_a": cty.ObjectVal(map[string]cty.Value{
+						"mount_point": cty.StringVal("/var/diska"),
+						"size":        cty.StringVal("50GB"),
+					}),
+				}),
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
-						"new_field":   cty.StringVal("new_value"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
 					}),
 				}),
 			}),
@@ -3943,33 +4534,37 @@ func TestResourceChange_nestedMap(t *testing.T) {
 				"root_block_device": cty.MapVal(map[string]cty.Value{
 					"a": cty.ObjectVal(map[string]cty.Value{
 						"volume_type": cty.StringVal("gp2"),
-						"new_field":   cty.StringVal("new_value"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
+					}),
+				}),
+				"leaf_block_device": cty.MapVal(map[string]cty.Value{
+					"a": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp2"),
+					}),
+					"b": cty.ObjectVal(map[string]cty.Value{
+						"volume_type": cty.StringVal("gp3"),
 					}),
 				}),
 			}),
-			AfterValMarks: []cty.PathValueMarks{
-				{
-					Path: cty.Path{cty.GetAttrStep{Name: "disks"},
-						cty.IndexStep{Key: cty.StringVal("disk_a")},
-						cty.GetAttrStep{Name: "mount_point"},
-					},
-					Marks: cty.NewValueMarks(marks.Sensitive),
-				},
-			},
 			RequiredReplace: cty.NewPathSet(),
-			Schema:          testSchemaPlus(configschema.NestingMap),
+			Schema:          testSchemaMultipleBlocks(configschema.NestingMap),
 			ExpectedOutput: `  # test_instance.example will be updated in-place
   ~ resource "test_instance" "example" {
       ~ ami   = "ami-BEFORE" -> "ami-AFTER"
-      ~ disks = {
-          + "disk_a" = {
-              + mount_point = (sensitive)
-              + size        = "50GB"
-            },
-        }
         id    = "i-02ae66f368e8518a9"
+        # (1 unchanged attribute hidden)
 
-        # (1 unchanged block hidden)
+      ~ leaf_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
+      ~ root_block_device "b" {
+          ~ volume_type = "gp2" -> "gp3"
+        }
+
+        # (2 unchanged blocks hidden)
     }
 `,
 		},
@@ -5459,6 +6054,50 @@ func testSchema(nesting configschema.NestingMode) *configschema.Block {
 	}
 }
 
+func testSchemaMultipleBlocks(nesting configschema.NestingMode) *configschema.Block {
+	return &configschema.Block{
+		Attributes: map[string]*configschema.Attribute{
+			"id":  {Type: cty.String, Optional: true, Computed: true},
+			"ami": {Type: cty.String, Optional: true},
+			"disks": {
+				NestedType: &configschema.Object{
+					Attributes: map[string]*configschema.Attribute{
+						"mount_point": {Type: cty.String, Optional: true},
+						"size":        {Type: cty.String, Optional: true},
+					},
+					Nesting: nesting,
+				},
+			},
+		},
+		BlockTypes: map[string]*configschema.NestedBlock{
+			"root_block_device": {
+				Block: configschema.Block{
+					Attributes: map[string]*configschema.Attribute{
+						"volume_type": {
+							Type:     cty.String,
+							Optional: true,
+							Computed: true,
+						},
+					},
+				},
+				Nesting: nesting,
+			},
+			"leaf_block_device": {
+				Block: configschema.Block{
+					Attributes: map[string]*configschema.Attribute{
+						"volume_type": {
+							Type:     cty.String,
+							Optional: true,
+							Computed: true,
+						},
+					},
+				},
+				Nesting: nesting,
+			},
+		},
+	}
+}
+
 // similar to testSchema with the addition of a "new_field" block
 func testSchemaPlus(nesting configschema.NestingMode) *configschema.Block {
 	return &configschema.Block{