tonfa@pirzuine:/tmp/t/t$ hg glog -q
@  3:94f95dfe36b2
|
| @  2:5006b89af187
|/|
o |  1:24f4224b3a38
 /
o  0:961e52e133c2

'a' moves to 'A' between 1 and 3.

This happens since 31141fd7c9cc , and seems related to the fix for issue1994 :

hg init t
cd t

echo "0" > A
hg -q ci -Am 0

hg -q up -C null
echo "1" > A
hg -q ci -Am 1

hg -q up -C 0
hg -q --config 'ui.merge=internal:local' merge -r 1
echo "2" > A
hg -q ci -m 2

hg -q up -C 1
hg mv A a
hg -q ci -Am 3

hg -q up -C 2
hg -y merge -r 3

On 1.4.3:
merging A and a to a
0 files updated, 1 files merged, 0 files removed, 0 files unresolved
(branch merge, don't forget to commit)

On 1.5:
 local changed A which remote deleted
use (c)hanged version or (d)elete? c
1 files updated, 0 files merged, 0 files removed, 0 files unresolved
(branch merge, don't forget to commit)