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I'm aware from the release notes that the sunset period for Liquidity Baking was extended with Hangzhou. I'm trying to understand exactly how long it has been extended, and on exactly what block Liquidity Baking will end.

In this merge request I see that for Hangzhou the sunset date was bumped up to 2_244_609.

However on the main branch it looks like that sunset level has been increased even further to 3_063_809.

Which one of these new sunset block levels is correct?

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The correct one is 2_244_609. On the master branch, the src/proto_alpha directory is a development version of the protocol not Hangzhou. The source code for Hangzhou is here.

Moreover, within the directory the relevant file is not lib_parameters/default_parameters.ml (which only defines default values of the parameter for testing purposes) but lib_protocol/raw_context.ml and in particular the code handling the migration from the previous version of the protocol.

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