Ok more information as to why this is a critical regression
By default the the mouse movement is clipped to the Display size. With this bug the size values used by Mouse are not updated when resizing using Display.setParent().
This causes the mouse movement to be clipped to the original display size.
A work around is to disable clipping of mouse coordinates using
Mouse.setClipMouseCoordinatesToWindow(false); // new in LWJGL 2.8
So most apps written against 2.7.x using the Canvas based resizing will break.