Comment 3 for bug 243359

Simple test which demonstrates this behavior:

mkdir test
cd test
bzr init a
echo -e "hello\nthere\npeople" > a/file
bzr add a/file
bzr commit -m "file" a
bzr branch a b

echo -e "hello\nthere2\npeople" > a/file
bzr commit -m "2" a
echo -e "hello\nthere2\npeople\nandthensome" >b/file
bzr commit -m "more" b

cd b
bzr merge ../a

This will show:
 M file
All changes applied successfully.

and then
$ bzr st
pending merges:
  John Arbash Meinel 2008-06-26 there2