@tonfa: @ringding: per msgs 7334 and 7324: these describe what we're seeing. 
Identical changes on two different branches are causing the wrong ancestor to be
used for a merge.  The correct ancestor is identified by debugancestor, but
merge --debug shows a different selection.

It's not about trying to correctly interpret the intent of such changes, it's
about providing valid diffs for comparison.

In our case, we have a graphical log that (much crud elided) looks like this:

@  changeset:   8037:89d3a91734bc
|
o    changeset:   8036:01dbf681df64
|\
| o    changeset:   8035:9cd60bb1f301
| |\
| | o    changeset:   8034:630af5a7e4e4
| | |\
| | | o    changeset:   8033:11a3c6757b91
| | | |\
| | | | o  changeset:   8032:b56f236530b5
| | | | |
| | | | | @  changeset:   8031:dad7ab7a3786
| | | | | |

| | | | | o  changeset:   8023:faf256d5c16c

| | | | | o  changeset:   7874:0c7adbb7ddc0
| | | | | |
+---------o  changeset:   7873:f69a0edc8643
| | | | |
o | | | |  changeset:   7872:40a9434212f6
| | | | |  

The files we're concerned with were changed in 8023, 8032, 8037, and 7749 (not
shown below, but in the linear heritage of 7872).  The changes in 8032 and 8031
were identical, and share the same filelog entry.  When attempting to merge 8031
and 8037, debugancestor correctly identifies 7872, but merge chooses 8023 as the
ancestor.  So the diffs for 8031 vs 8023 are empty, even though our files were
changed on this branch, and the diffs for 8037 vs 8023 are completely bogus,
because they're not even on the same branch.