I am interested to work on this bug and currently investigating on this.
By my initial understanding we need to use EphemeralRange instead of Range for this particular function. 
On doing so we will be adding "commonAncestorContainer" functionality for EphemeralRange function. Please let me know if my understanding is correct. Thanks!!!

#3: Go ahead, your understanding is correct.

I'm a virtual owner of this issue.

tanvir.rizvi@ starts working.
In review: http://crrev.com/2725603002

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/31211cb8a35a8d9f6664a0f1f6d1957576e077e3

commit 31211cb8a35a8d9f6664a0f1f6d1957576e077e3
Author: tanvir.rizvi <tanvir.rizvi@samsung.com>
Date: Tue Mar 07 16:07:40 2017

createFragmentFromMarkupWithContext() should use EphemeralRange.

Use EphemeralRange instead of Range in createFragmentFromMarkupWithContext()

BUG= 691201 

Review-Url: https://codereview.chromium.org/2725603002
Cr-Commit-Position: refs/heads/master@{#455087}

[modify] https://crrev.com/31211cb8a35a8d9f6664a0f1f6d1957576e077e3/AUTHORS
[modify] https://crrev.com/31211cb8a35a8d9f6664a0f1f6d1957576e077e3/third_party/WebKit/Source/core/editing/EphemeralRange.cpp
[modify] https://crrev.com/31211cb8a35a8d9f6664a0f1f6d1957576e077e3/third_party/WebKit/Source/core/editing/EphemeralRange.h
[modify] https://crrev.com/31211cb8a35a8d9f6664a0f1f6d1957576e077e3/third_party/WebKit/Source/core/editing/EphemeralRangeTest.cpp
[modify] https://crrev.com/31211cb8a35a8d9f6664a0f1f6d1957576e077e3/third_party/WebKit/Source/core/editing/serializers/Serialization.cpp