I am pretty sure it is a bug. When you update some file using "update" command, fossil does not account this relation later, when it searches for the nearest common ancestor. As a result, it counts the update as an "edit" and later fails to merge the files properly. This behavior is illustrated in the test repository here: https://chiselapp.com/user/johnfound/repository/bad_update_test/timeline It contains only one file "A.txt". Two branches, containing the test ground - "trunk" and "Br2", and the branch "BadMergeResults" that contains the conflicting files after the last "merge" attempt.
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