Feasibility of phenyl migration
This is similar to pinacol-pinacolone rearrangement. Only difference is in pinacol-pinacolone rearrangement, carbocation forms by dehydration while here, it forms through diazonium reaction. Following is the tentative mechanism of the rearrangement:

Since reaction progress through carbocation intermediate, the final product is a racemic mixture. $\ce{CH3-C+-CH3}$ (in pinacol) or $\ce{CH3-C+-H}$ (in given compound) can rotate about middle horizontal bond before alkyl or aryl group migration.