Hg merge behaves differently than default command line with removed files

Originally raised here: https://answers.atlassian.com/questions/169987/how-to-make-sourcetree-prompt-for-conflict-files-in-a-merge

The problem appears to be merging branch A into branch B, where files have been removed in branch A but still exist in branch B and have been modified in branch B since B branched from A (in the example, branch A was 'develop' and branch B was a feature branch). A conflict for these files was expected and happened on the command line but not in SourceTree.

It may be related to the fact that SourceTree uses a merge helper tool (merge-tools.sourcetreebulkmerge), this is to prevent hg from prompting to resolve conflicts for every file as the 'hg merge' runs, and instead to create the 'chevron' files which can be resolved later at the user's discretion. Perhaps this is not dealing correctly with this specific case.