The linked issue #14960 shows a case where babel breaks the behavior of a code snippet:

switch ('what') {
default:
    console.log(a())
    function a() { return 1; }
}

The issue is that function a() {} gets converted into var a = function() {}, but isn't hoisted to the top as it should. Babel currently hoists functions correctly when they are in block statements, but not in case statements.
Fixing this problem in all cases is difficult, due to the issue pointed to in an answer to that ticket:

switch (x) {
  case 0:
    let num = 3;
    log(0);
  default:
    log(1);
    function log(s) { console.log(s || num) }
}

In the example above, moving log to the first case breaks the second, but keeping the log in the second case does not address the first.

Nevertheless, the current behavior is a problem. This Pull Request addresses this by hoisting the function to the start of the matching case. This does not address all issues, but it shouldn't break anything that isn't already broken, and it should fix issues as the function is "more hoisted" than it used to be. Notably, this fixes issues with functions that are only ever referenced in the same case that declares them, which is the case I encountered.