In a lecture on PCA the lecturer claimed that (and I've also found it in this answer but it had 17 comments and I didn't want to make them 17 more)

instead of calculating the eigenvalue decomposition of $S := X X^T$, we compute the singular value decomposition of $X$, as this is computationally more stable, i.e. the Läuchli matrix $$X := \begin{pmatrix} 1 & 1 & 1 \\ \varepsilon & 0 & 0 \\ 0 & \varepsilon & 0 \\ 0 & 0 & \varepsilon \end{pmatrix}^{\top} = \begin{pmatrix} 1 & \varepsilon & 0 & 0 \\ 1 & 0 & \varepsilon & 0 \\ 1 & 0 & 0 & \varepsilon \end{pmatrix}.$$

Now I used WolframAlpha (I don't have access to Mathematica) to calculate the SVD of $X$: $$ \begin{pmatrix} -\frac{1}{\sqrt{2}} & -\frac{1}{\sqrt{6}} & \frac{1}{\sqrt{3}} \\ 0 & \sqrt{\frac{2}{3}} & \frac{1}{\sqrt{3}} \\ \frac{1}{\sqrt{2}} & - \frac{1}{\sqrt{6}} & \frac{1}{\sqrt{3}} \end{pmatrix} \begin{pmatrix} \varepsilon & 0 & 0 & 0\\ 0 & \varepsilon & 0 & 0\\ 0 & 0 & \sqrt{\varepsilon^2 + 3} & 0 \end{pmatrix} \begin{pmatrix} 0 & 0 & \frac{3}{\sqrt{3 \varepsilon^2 + 9}} & -\frac{\varepsilon}{\sqrt{\varepsilon^2 + 3}} \\ -\frac{\varepsilon}{\sqrt{2 \varepsilon}} & -\frac{\varepsilon}{\sqrt{6 \varepsilon}} & \frac{\varepsilon}{\sqrt{3 \varepsilon^2 + 9}} & \frac{1}{\sqrt{\varepsilon^2 + 3}} \\ 0 & \sqrt{\frac{2}{3}}& \frac{\varepsilon}{\sqrt{3 \varepsilon^2 + 9}} & \frac{1}{\sqrt{\varepsilon^2 + 3}} \\ \frac{\varepsilon}{\sqrt{2 \varepsilon}} & -\frac{\varepsilon}{\sqrt{6 \varepsilon}} & \frac{\varepsilon}{\sqrt{3 \varepsilon^2 + 9}} & \frac{1}{\sqrt{\varepsilon^2 + 3}} \end{pmatrix}^{\top} $$ and the eigendecomposition of $$S = \begin{pmatrix} \varepsilon^2 + 1 & 1 & 1 \\ 1 & \varepsilon^2 + 1 & 1 \\ 1 & 1 & \varepsilon^2 + 1 \end{pmatrix} = \begin{pmatrix} -1 & -1 & 1 \\ 0 & 1 & 1 \\ 1 & 0 & 1 \end{pmatrix} \begin{pmatrix} \varepsilon^2 & 0 & 0 \\ 0 & \varepsilon^2 & 0 \\ 0 & 0 & \varepsilon^2 + 3 \end{pmatrix} \cdot \frac{1}{3}\begin{pmatrix} -1 & -1 & 1 \\ -1 & 1 & -1 \\ 1 & 1 & 1 \end{pmatrix}. $$ Now if $\varepsilon > 0$ is small, terms of the form $\frac{3}{\sqrt{3 \varepsilon^2 + 9}}$ probably cause trouble, whereas the diagonalization (aka eigendecomposition) seems to be very easily computable. Therefore I expect the operation that yield those decompositions to be computationally more stable but I can't figure out how. What did I miss?