Very interesting case; thanks for passing it along. I thought Junio had brought up this case while reviewing patches several months back and we discussed it, but I can't find it right now. The short answer is that yes there's a difference in behavior, but no bug. I'll summarize and provide a 'TAKEAWAY' in the final paragraph, but there's lots of nuance here that probably deserves explaining for the curious.
WARNING: lengthy details follow; skip to final paragraph of the whole
email if you want to skim
So, I'm assuming you're curious about why there's no bug despite a difference in behavior. So, let me explain (a) the crux of your testcase -- what's happening and why, (b) similar-ish cases with behavioral changes that were explicitly discussed and documented in the past year (for BOTH merge-ort and merge-recursive), (c) some similar cases not discussed and documented, and for which the recursive backend gives a "worse" answer according to what you suggested "worse" meant, and (d) some warning/advice for folks dealing with multiple files/directories whose contents are quite similar.
=== (a) what's happening and why ===
In your testcase, you can drop all files other than
* folder1/firstfile.txt
* folder2/secondfile.txt
* folder2/secondfile_renamed.txt
and any commits not touching those files can be dropped. In simpler
terms, your testcase is:
* Merge base: Has both folder1/firstfile.txt and folder2/secondfile.txt
* feature branch: delete folder1/firstfile.txt
* master branch: delete both folder1/firstfile.txt and
folder2/secondfile.txt, introduce folder2/secondfile_renamed.txt which
is very similar to both deleted files, but more so to the latter
If you're thinking my description of the master branch is funny (as
per your wording, you renamed folder2/secondfile.txt to
folder2/secondfile_renamed.txt), remember that git doesn't track
renames.
So, when git goes to merge, renames between the merge base say there have been two files deleted and one new one added. Since folder2/secondfile.txt was unmodified in the feature branch, any renames affecting it won't result in three-way content merges anyway, and thus was removed from rename detection. That only leaves folder1/firstfile.txt and folder2/secondfile_renamed.txt left to even compare, and since it only compares those two, it matches them up as a rename. That explains what is happening here, and why.
Note that this particular change came from my "Optimization batch 9" in merge ort, and was the optimization that I think was more important than all the others combined.
But some, seeing this case in isolation, might be thinking "regression", so let's dive into more nuance...
=== (b) similar-ish cases discussed and documented explicitly in the past year ===
We decided in "Optimization batch 7" to actually relax the "best match" criteria. Note that we changed the documentation in commit 07c9a7fcb5 ("gitdiffcore doc: mention new preliminary step for rename detection", 2021-02-14) to include the following:
''' So, for example, if a deleted docs/ext.txt and an added docs/config/ext.txt are similar enough, they will be marked as a rename and prevent an added docs/ext.md that may be even more similar to the deleted docs/ext.txt from being considered as the rename destination in the later step. '''
This was related to some discussions we had around performance, including the following statement I made at the time:
''' We will give up "optimal" matches, but as long as what we provide are "reasonable" matches I think that should suffice. I personally believe "reasonable" at O(N) cost trumps "optimal" at O(N^2). '''
(It may also be worth noting that the optimization affecting your testcase, from "batch 9", was one that often provides reasonable renames at O(0) cost; O(0) is even more of an improvement over O(N^2) than O(N) is.)
Somewhat interesting here is that this "Optimization batch 7" isn't
just new to merge-ort; it also affects merge-recursive. So if we
changed your testcase as follows:
* feature branch: make a small tweak to both folder1/firstfile.txt
and folder2/secondfile.txt
* master branch: delete both folder1/firstfile.txt and
folder2/secondfile.txt, and introduce newfolder/firstfile.txt that is
more similar to folder2/secondfile.txt
then both merge-ort and merge-recursive today will match up the
folder1/firstfile.txt -> newfolder/firstfile.txt. (Whereas a year
ago, it would have matched up folder2/secondfile.txt ->
newfolder/firstfile.txt).
But the nuance goes a bit further...
=== (c) some similar cases not discussed and documented, and for which the recursive backend gives a "worse" answer by your explanation of "worse" as being that it gives conflicts ===
If you modified your testcase slightly:
* feature branch: modify folder1/firstfile.txt slightly
and as a reminder, the other branches were:
* Merge base: Has both folder1/firstfile.txt and folder2/secondfile.txt
* master branch: delete both folder1/firstfile.txt and
folder2/secondfile.txt, introduce folder2/secondfile_renamed.txt which
is very similar to both deleted files, but more so to the latter
Then merge-recursive will fail with conflicts while merge-ort will succeed without any.
Is that better? Worse? For which backend? Before you make your
call, let's consider the following slightly different case:
* Merge base: Has files A & B (very similar, but not exact)
* feature branch: Modify B, in an area where it differs from A
* master branch: Copy A to C (while modifying it slightly in the
area it differs from B) in one commit, then delete B in another
commit.
From the point of view of "best matches", we would have "A was left alone, B is modified slightly on one side and deleted on the other, and C is a new file" so the result should be "the original A, the new C from master, and a modify/delete conflict on B". However, merge-recursive and merge-ort will instead claim there was a B->C rename and since they have conflicting content changes in the same area, fill C with conflict markers from these "unrelated" files that the user then has to separate.
So, should merge-ort and merge-recursive do copy detection in order to get the "best" matches? Practically speaking, doing so means not only dropping the recent optimizations that sped up rename detection by a few orders of magnitude, we're actually talking about taking the slow version of merge-recursive from before this year and slowing it down a few extra orders of magnitude in order to get copy detection -- making it overall several orders of magnitude slower than today's merge-ort.
But maybe you still think this is a correctness issue, and performance is irrelevant. So let's go a little further in the nuance, so I can demonstrate that "best matches" actually can give you demonstrably and laughably wrong results:
=== (d) some warning/advice for folks dealing with multiple files whose contents are quite similar (or even multiple directories of files whose contents are quite similar) ===
During the testing of merge-ort, I dug through many repositories and remerged all existing merges to see which might give different results with merge-ort vs. Git v2.30's merge-recursive. I did find some, though they came from the basename-guided matching change (discussed in my section (b) above) rather than the unmodified-one-on-side change (the case you pointed out in your email). However, every single one of the examples I found came from an interesting type of situation: it appears that a number of big projects sometimes make a complete copy of some directory (a library, a driver, whatever), and keep them both. Many times this might be to keep one stable, while making modifications to the other copy to add new features or abilities. It's also possible that there was an earlier rename involved before we got the current two names as well. So, with that in mind here's a question: what do you do when cherry-picking new features added to an older version of the code? If we use your "highest percentage match" as you mentioned earlier, we'll likely end up applying the cherry-picked changes to the _stable_ files rather than the new version, because the copy meant to be stable is more similar to the older version. That's likely the wrong target. But it gets worse...
Some new feature is probably going to touch several files in the relevant directory, not just one. That raises the question of where do the files each match individually? I saw multiple examples where the "best" match for individual files left half the files matching the current stable version of the library/driver/whatever, and the other half of the files matched against the new version of the library/driver/whatever. That means that porting those patches using merge/cherry-pick/rebase/etc. is going to apply half the patches to one copy and the other half of the patches to the other copy. That just cannot possibly be right. merge-ort didn't fix this, it basically just meant it'd sometimes choose a slightly different mix of application targets, but still split them across the two copies. Well, technically merge-ort is marginally better here because the directory-rename-guided-optimizations in merge-ort means that it's slightly more likely to apply all the changes to one directory than merge-recursive is. But only slightly. So these are situations where both algorithms are likely to provide results that users will almost certainly classify as wrong (and maybe even as "extremely wrong").
If your repository is one where each file is pretty unique, then rename detection seems to be a lot more reasonable and straightforward to just run automatically. But if you have multiple near copies of the same file, and especially if you have multiple near copies of the same directory, then relying on git's automatic rename detection without double checking is a bad idea. Git does a good job during a merge of printing out which files it has detected as renames and displaying which files have three-way content merges performed on them, so I'd recommend looking at those a lot closer if you've got multiple near copies of the same file or directories.