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> Which is good, we don't want a 'smart' tool to do the wrong thing and silently introduce bugs

Then that example you link means that you should stop using 3-way merge / git / svn / mercurial.

You are correct, there are no diff3 conflicts, thanks again for the clarification. The problem is fundamentally ambiguous, and the argument a bit more subtle. As a rule of thumb, when two heuristics are available, pick the simplest one (e.g. the one requiring fewer inputs), especially if a human needs to wrap their head around the rare cases where the heuristic goes wrong.

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