Sourcetree hangs resolving merge conflict where one side deleted the file

This done on Sourcetree for Windows (1.9.10.0).

Scenario:
Add a new file "test.txt" to master and commit.
Delete file "test.txt" and commit to master.
Create and checkout a new branch ("other") based on the commit which added test.txt (before the modification).
Modify test.txt and commit this to "other".

Now attempt to merge master (which has the file deleted) into the "other" branch.

The Visual Merge In Progress window appears - but nothing happens after that. The merge tool does not get invoked. Giving up and eventually pressing abort also leaves the temporary files used by the merge (test_BACKUP, test_BASE, test_LOCAL, test_REMOTE).

Open the terminal and enter git mergetool test.txt (ensure you have a mergetool configured).

Note that it sits on a prompt:
$ git mergetool test.txt
Merging:
test.txt

Deleted merge conflict for 'test.txt':

{local}

: modified file

{remote}

: deleted
Use (m)odified or (d)eleted file, or (a)bort?

I assume this prompt is where Sourcetree is hanging as well. I have attached zip file containing the repo where the merge can be attempted.