mercurial/merge.py

--- a/mercurial/merge.py	Thu Mar 22 22:56:29 2018 -0400
+++ b/mercurial/merge.py	Thu Mar 22 22:58:31 2018 -0400
@@ -707,7 +707,7 @@
             for p, dirs, files in repo.wvfs.walk(f):
                 for fn in files:
                     relf = util.pconvert(repo.wvfs.reljoin(p, fn))
-                    relf = repo.dirstate.normalize(relf)
+                    relf = repo.dirstate.normalize(relf, isknown=True)
                     if relf not in repo.dirstate:
                         return f
         return None