Subject: possibly a spurious conflict in a three way merge

From: [email-masked]
Date: Thu, 07 Aug 2014 12:30:22 -0400

git 2.0.4 on ubuntu 14.04 64

1. new repo
2. commit test.txt to master:
line1
line1

3. branch and checkout branch1
4. make and commit the following change to branch1:
#line1
#line2

5. checkout master
6. make and commit the following change to master:
line1
#line2

7. merge branch1, git sees a conflict:
<<<<<<< HEAD
line1
=======
#line1
 >>>>>>> branch1
#line2

Why?  The first line changed in branch1 but not in master so a 3 way 
merge should take branch1 changes.  Beyond Compare ( used as a 
mergetool) does not flag any conflicts.