diff -r 4b56219a5ac2 -r ccbaa2ed11a4 mercurial/context.py
--- a/mercurial/context.py	Mon Jan 05 16:52:12 2015 -0800
+++ b/mercurial/context.py	Mon Jan 05 17:12:04 2015 -0800
@@ -140,16 +140,17 @@
         deletedset = set(deleted)
         withflags = mf1.withflags() | mf2.withflags()
         for fn, mf2node in mf2.iteritems():
+            if fn in deletedset:
+                continue
             if fn in mf1:
-                if (fn not in deletedset and
-                    ((fn in withflags and mf1.flags(fn) != mf2.flags(fn)) or
+                if ((fn in withflags and mf1.flags(fn) != mf2.flags(fn)) or
                      (mf1[fn] != mf2node and
-                      (mf2node != _newnode or self[fn].cmp(other[fn]))))):
+                      (mf2node != _newnode or self[fn].cmp(other[fn])))):
                     modified.append(fn)
                 elif listclean:
                     clean.append(fn)
                 del mf1[fn]
-            elif fn not in deletedset:
+            else:
                 added.append(fn)
         removed = mf1.keys()
         if removed: