diff -r f254ab6207ae -r 798ab869b2ee mercurial/hg.py
--- a/mercurial/hg.py	Tue Nov 27 20:56:27 2012 -0500
+++ b/mercurial/hg.py	Tue Nov 27 21:31:59 2012 -0500
@@ -171,14 +171,11 @@
     r = repository(ui, root)
 
     default = srcrepo.ui.config('paths', 'default')
-    if not default:
-        # set default to source for being able to clone subrepos
-        default = os.path.abspath(util.urllocalpath(origsource))
-    fp = r.opener("hgrc", "w", text=True)
-    fp.write("[paths]\n")
-    fp.write("default = %s\n" % default)
-    fp.close()
-    r.ui.setconfig('paths', 'default', default)
+    if default:
+        fp = r.opener("hgrc", "w", text=True)
+        fp.write("[paths]\n")
+        fp.write("default = %s\n" % default)
+        fp.close()
 
     if update:
         r.ui.status(_("updating working directory\n"))