mercurial/filemerge.py

--- a/mercurial/filemerge.py	Thu Aug 31 22:39:10 2017 -0700
+++ b/mercurial/filemerge.py	Tue Sep 05 12:04:02 2017 -0700
@@ -468,7 +468,7 @@
     a = _workingpath(repo, fcd)
     fd = fcd.path()
 
-    util.copyfile(a, a + ".local")
+    util.writefile(a + ".local", fcd.decodeddata())
     repo.wwrite(fd + ".other", fco.data(), fco.flags())
     repo.wwrite(fd + ".base", fca.data(), fca.flags())
     return False, 1, False