mercurial/merge.py

--- a/mercurial/merge.py	Wed Jun 30 18:15:23 2010 -0500
+++ b/mercurial/merge.py	Wed Jun 30 23:56:35 2010 -0500
@@ -167,7 +167,7 @@
     m1, m2, ma = p1.manifest(), p2.manifest(), pa.manifest()
     copied = set(copy.values())
 
-    if not overwrite and '.hgsubstate' in m1:
+    if '.hgsubstate' in m1:
         # check whether sub state is modified
         for s in p1.substate:
             if p1.sub(s).dirty():