Reported on users:
http://svn.haxx.se/users/archive-2013-04/0196.shtml
http://mail-archives.apache.org/mod_mbox/subversion-users/201304.mbox/%3C51778828.5000109@iar.se%3E
svnadmin create repo --compatible-version 1.6
svn -mm mkdir --parents file://`pwd`/repo/T/A
svn -mm mkdir file://`pwd`/repo/T/M
svnmucc -mm propset svn:externals '^/T/M B' file://`pwd`/repo/T/A
svn -mm cp file://`pwd`/repo/T/A ^/T/C
svnmucc -mm mkdir file://`pwd`/repo/T/A/B propset svn:externals '^/T/M B/D'
file://`pwd`/repo/T/A
Merging the mkdir/external change into C fails:
$ svn co http://localhost/repo/T/C wc
$ svn merge ^/T/A wc
svn: E200007: Can't add '/home/pm/sw/subversion/obj/wc/B' with URL
'http://localhost:8888/obj/repo/T/A/B', but with the data from
'http://localhost:8888/obj/repo/T/M'
Updating the mkdir/external change fails with a conflict:
$ svn co http://localhost/repo/T/A@4 wc
$ svn up wc
$ svn up wc --accept postpone
Updating 'wc':
C wc/B
Fetching external item into 'wc/B/D':
External at revision 5.
At revision 5.
Summary of conflicts:
Tree conflicts: 1
Major