Instead, when going diagonally, the mine-cart rails will turn left, turn right, turn left, turn right, etc. etc. I have not tested it in any v. other than 1.4.7, no screenshot, hopefully you guys can replicate it, and then fix it! Mine-craft also did the bug in survival. I had TMI (too many items mod) installed, but it does it regardless of whether the mod is installed. I mentioned that because that was what I had installed when I discovered the bug. (I just use it to change the time of day, and to switch to creative to fly between my structures) I think this is a low priority bug, switch other bugs first.
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I know that, but previously, when you placed rails so they turned left, turned right, turned left, etc. they would switch to appear diagonal, similiar to sloped rails switching to appear sloped.

That was never part of vanilla Minecraft.

This ticket is invalid as it relates to a modded or 3rd party client/server.
Any non-standard client/server build needs to be taken up with the appropriate team, not Mojang.
Any plugin issues need to be addressed to the plugin creator.
This site is for addressing issues related to the base unmodded MineCraft.

I just tested MC to get a screenshot, and I realized that it switched the direction of the minecart, not the rails. sorry.
There are no diagonal rails in Minecraft.