fix(merge): resolve multiple merge-related issues (ACS-194, ACS-179, ACS-174, ACS-163) (#885)

* fix(merge): resolve multiple merge-related issues (ACS-194, ACS-179, ACS-174, ACS-163)

- ACS-179: Fix TypeError in print_conflict_info - handle both string and dict conflict formats
- ACS-174: Handle git hook failures during merge - skip checkout if already on target branch
- ACS-163: Fix merge failure fallthrough - return False immediately when merge fails
- ACS-194: Improve AI merge success rate - add Haiku→Sonnet fallback with enhanced prompts

All fixes include regression tests.

* fix: improve merge robustness and fix test issues

This commit addresses multiple issues related to merge functionality
and test quality:

1. workspace.py:
   - Fix case-insensitive natural language pattern matching to detect
     AI explanations returned instead of code

2. worktree.py:
   - Guard against None stderr when handling git hook failures
   - Improve error messages for merge hook handling

3. workspace/display.py:
   - Improve print_conflict_info() to properly categorize conflicts
     (marker vs AI merge failures)
   - Add severity indicators (🔴 for high, 🟡 for medium)
   - Use shlex.quote() for proper git add command quoting
   - Provide clearer guidance for different conflict types

4. tests/test_merge_ai_resolver.py:
   - Fix test assertions to match actual AI_MERGE_SYSTEM_PROMPT content
     (check for "intelligently" and "task's intent" instead of
      non-existent "semantic understanding")

5. tests/test_workspace.py:
   - Add side-effect verification for merge failure tests
   - Remove unused fixtures
   - Add assertions for severity emoji indicators

6. tests/test_worktree.py:
   - Add subprocess return code checks for better test reliability

Related: ACS-194, ACS-179, ACS-174, ACS-163

* fix: improve display formatting and use proper imports

1. display.py:
   - Fix trailing space when severity_icon is empty (low/unknown severity)
   - Only add leading space to icon when icon is non-empty

2. workspace/__init__.py:
   - Export AI_MERGE_SYSTEM_PROMPT and _build_merge_prompt
   - Add to __all__ for public API access

3. test_merge_ai_resolver.py:
   - Use standard imports from core.workspace package
   - Remove fragile importlib.util dynamic loading

* fix: address all 6 review findings

1. workspace.py:
   - Fix parameter naming: max_thinking -> max_thinking_tokens
     (matches codebase convention used in 25+ locations)
   - Extract hardcoded model constants: MERGE_FAST_MODEL,
     MERGE_CAPABLE_MODEL, MERGE_FAST_THINKING, MERGE_COMPLEX_THINKING
   - Improve natural language detection: check patterns at START of line
     and require absence of code patterns to reduce false positives

2. display.py:
   - Add critical severity icon handling (⛔ for critical severity)

3. worktree.py:
   - Fix inconsistent stderr handling: use truthiness check for both
     branches (empty strings show '<no stderr>')

4. test_workspace.py:
   - Remove unused imports: patch, MagicMock from unittest.mock

Related: ACS-194

---------

Co-authored-by: StillKnotKnown <stillknotknown@users.noreply.github.com>
Co-authored-by: Andy <119136210+AndyMik90@users.noreply.github.com>

apps/backend/core/workspace.py

@@ -277,6 +277,13 @@ def merge_existing_build(
                             no_commit, stats, spec_name=spec_name, keep_worktree=True
                         )
                         return True
+                    else:
+                        # Standard git merge failed - report error and don't continue
+                        print()
+                        print_status(
+                            "Merge failed. Please check the errors above.", "error"
+                        )
+                        return False
             elif smart_result.get("git_conflicts"):
                 # Had git conflicts that AI couldn't fully resolve
                 resolved = smart_result.get("resolved", [])
@@ -1425,18 +1432,41 @@ import os
 _merge_logger = logging.getLogger(__name__)
 
 # System prompt for AI file merging
-AI_MERGE_SYSTEM_PROMPT = """You are an expert code merge assistant. Your task is to perform a 3-way merge of code files.
+AI_MERGE_SYSTEM_PROMPT = """You are an expert code merge assistant specializing in intelligent 3-way merges. Your task is to merge code changes from two branches while preserving all meaningful changes.
 
-RULES:
+CONTEXT:
-1. Preserve all functional changes from both versions (ours and theirs)
+- "OURS" = current main branch (target for merge)
-2. Maintain code style consistency
+- "THEIRS" = task worktree branch (changes being merged in)
-3. Resolve conflicts by understanding the semantic purpose of each change
+- "BASE" = common ancestor before changes
-4. When changes are independent (different functions/sections), include both
-5. When changes overlap, combine them logically or prefer the more complete version
-6. Preserve all imports from both versions
-7. Output ONLY the merged code - no explanations, no markdown, no code fences
 
-IMPORTANT: Output the raw merged file content only. Do not wrap in code blocks."""
+MERGE STRATEGY:
+1. **Preserve all functional changes** - Include all features, bug fixes, and improvements from both versions
+2. **Combine independent changes** - If changes are in different functions/sections, include both
+3. **Resolve overlapping changes intelligently**:
+   - Prefer the more complete/updated implementation
+   - Combine logic if both versions add value
+   - When in doubt, favor the version that better addresses the task's intent
+4. **Maintain syntactic correctness** - Ensure the merged code is valid and compiles/runs
+5. **Preserve imports and dependencies** from both versions
+
+HANDLING COMMON PATTERNS:
+- New functions/classes: Include all from both versions
+- Modified functions: Merge changes logically, prefer more complete version
+- Imports: Union of all imports from both versions
+- Comments/Documentation: Include relevant documentation from both
+- Configuration: Merge settings, with conflict resolution favoring task-specific values
+
+CRITICAL RULES:
+- Output ONLY the merged code - no explanations, no prose, no markdown fences
+- If you cannot determine the correct merge, make a reasonable decision based on best practices
+- Never output error messages like "I need more context" - always provide a best-effort merge
+- Ensure the output is complete and syntactically valid code"""
+
+# Model constants for AI merge two-tier strategy (ACS-194)
+MERGE_FAST_MODEL = "claude-haiku-4-5-20251001"  # Fast model for simple merges
+MERGE_CAPABLE_MODEL = "claude-sonnet-4-5-20250929"  # Capable model for complex merges
+MERGE_FAST_THINKING = 1024  # Lower thinking for fast/simple merges
+MERGE_COMPLEX_THINKING = 16000  # Higher thinking for complex merges
 
 
 def _infer_language_from_path(file_path: str) -> str:
@@ -1525,7 +1555,7 @@ def _build_merge_prompt(
         if len(base_content) > 10000:
             base_content = base_content[:10000] + "\n... (truncated)"
         base_section = f"""
-BASE (common ancestor):
+BASE (common ancestor before changes):
 ```{language}
 {base_content}
 ```
@@ -1537,20 +1567,22 @@ BASE (common ancestor):
     if len(worktree_content) > 15000:
         worktree_content = worktree_content[:15000] + "\n... (truncated)"
 
-    prompt = f"""Perform a 3-way merge for file: {file_path}
+    prompt = f"""FILE: {file_path}
-Task being merged: {spec_name}
+TASK: {spec_name}
+
+This is a 3-way code merge. You must combine changes from both versions.
 {base_section}
-OURS (current main branch):
+OURS (current main branch - target for merge):
 ```{language}
 {main_content}
 ```
 
-THEIRS (changes from task worktree):
+THEIRS (task worktree branch - changes being merged):
 ```{language}
 {worktree_content}
 ```
 
-Merge these versions, preserving all meaningful changes from both. Output only the merged file content, no explanations."""
+OUTPUT THE MERGED CODE ONLY. No explanations, no markdown fences."""
 
     return prompt
 
@@ -1568,6 +1600,112 @@ def _strip_code_fences(content: str) -> str:
     return content
 
 
+async def _attempt_ai_merge(
+    task: "ParallelMergeTask",
+    prompt: str,
+    model: str = MERGE_FAST_MODEL,
+    max_thinking_tokens: int = MERGE_FAST_THINKING,
+) -> tuple[bool, str | None, str]:
+    """
+    Attempt an AI merge with a specific model.
+
+    Args:
+        task: The merge task with file contents
+        prompt: The merge prompt
+        model: Model to use for merge
+        max_thinking_tokens: Max thinking tokens for the model
+
+    Returns:
+        Tuple of (success, merged_content, error_message)
+    """
+    try:
+        from core.simple_client import create_simple_client
+    except ImportError:
+        return False, None, "core.simple_client not available"
+
+    client = create_simple_client(
+        agent_type="merge_resolver",
+        model=model,
+        system_prompt=AI_MERGE_SYSTEM_PROMPT,
+        max_thinking_tokens=max_thinking_tokens,
+    )
+
+    response_text = ""
+    async with client:
+        await client.query(prompt)
+
+        async for msg in client.receive_response():
+            msg_type = type(msg).__name__
+            if msg_type == "AssistantMessage" and hasattr(msg, "content"):
+                for block in msg.content:
+                    block_type = type(block).__name__
+                    if block_type == "TextBlock" and hasattr(block, "text"):
+                        response_text += block.text
+
+    if response_text:
+        merged_content = _strip_code_fences(response_text.strip())
+
+        # Check if AI returned natural language instead of code (case-insensitive)
+        # More robust detection: (1) Check if patterns are at START of line, (2) Check for
+        # absence of code patterns like imports, function definitions, braces, etc.
+        natural_language_patterns = [
+            "i need to",
+            "let me",
+            "i cannot",
+            "i'm unable",
+            "the file appears",
+            "i don't have",
+            "unfortunately",
+            "i apologize",
+        ]
+
+        first_line = merged_content.split("\n")[0] if merged_content else ""
+        first_line_stripped = first_line.lstrip()
+        first_line_lower = first_line_stripped.lower()
+
+        # Check if first line STARTS with natural language pattern (not just contains it)
+        starts_with_prose = any(
+            first_line_lower.startswith(pattern)
+            for pattern in natural_language_patterns
+        )
+
+        # Also check for absence of common code patterns to reduce false positives
+        has_code_patterns = any(
+            pattern in merged_content[:500]  # Check first 500 chars for code patterns
+            for pattern in [
+                "import ",  # Python/JS/TypeScript imports
+                "from ",  # Python imports
+                "def ",  # Python functions
+                "function ",  # JavaScript functions
+                "const ",  # JavaScript/TypeScript const
+                "class ",  # Class definitions
+                "{",  # Braces indicate code
+                "}",  # Braces indicate code
+                "#!",  # Shebang
+                "<!--",  # HTML comment
+            ]
+        )
+
+        # Only reject if it starts with prose AND lacks code patterns
+        if starts_with_prose and not has_code_patterns:
+            return (
+                False,
+                None,
+                f"AI returned explanation instead of code: {first_line[:80]}...",
+            )
+
+        # Validate syntax
+        is_valid, syntax_error = _validate_merged_syntax(
+            task.file_path, merged_content, task.project_dir
+        )
+        if not is_valid:
+            return False, None, f"Invalid syntax: {syntax_error}"
+
+        return True, merged_content, ""
+    else:
+        return False, None, "AI returned empty response"
+
+
 async def _merge_file_with_ai_async(
     task: ParallelMergeTask,
     semaphore: asyncio.Semaphore,
@@ -1625,83 +1763,42 @@ async def _merge_file_with_ai_async(
                 task.spec_name,
             )
 
-            # Call Claude Haiku for fast merge
+            # Call Claude Haiku for fast merge first, then fallback to Sonnet if it fails
-            try:
+            # This two-tier approach matches the chat agent's success rate
-                from core.simple_client import create_simple_client
+            # - Tier 1: Haiku (fast, handles simple merges)
-            except ImportError:
+            # - Tier 2: Sonnet (more capable, handles complex merges)
-                return ParallelMergeResult(
+            debug(MODULE, f"Attempting AI merge for {task.file_path} with Haiku (fast)")
-                    file_path=task.file_path,
+            success, merged_content, error = await _attempt_ai_merge(
-                    merged_content=None,
+                task,
-                    success=False,
+                prompt,
-                    error="core.simple_client not available",
+                model=MERGE_FAST_MODEL,
-                )
+                max_thinking_tokens=MERGE_FAST_THINKING,
-
-            client = create_simple_client(
-                agent_type="merge_resolver",
-                model="claude-haiku-4-5-20251001",
-                system_prompt=AI_MERGE_SYSTEM_PROMPT,
-                max_thinking_tokens=1024,  # Low thinking for speed
             )
 
-            response_text = ""
+            if success and merged_content:
-            async with client:
+                debug(MODULE, f"Haiku merged {task.file_path} successfully")
-                await client.query(prompt)
+                return ParallelMergeResult(
-
+                    file_path=task.file_path,
-                async for msg in client.receive_response():
+                    merged_content=merged_content,
-                    msg_type = type(msg).__name__
+                    success=True,
-                    if msg_type == "AssistantMessage" and hasattr(msg, "content"):
+                    was_auto_merged=False,
-                        for block in msg.content:
-                            # Must check block type - only TextBlock has .text attribute
-                            block_type = type(block).__name__
-                            if block_type == "TextBlock" and hasattr(block, "text"):
-                                response_text += block.text
-
-            if response_text:
-                # Strip any code fences the model might have added
-                merged_content = _strip_code_fences(response_text.strip())
-
-                # VALIDATION: Check if AI returned natural language instead of code
-                # This catches cases where AI says "I need to see more..." instead of merging
-                natural_language_patterns = [
-                    "I need to",
-                    "Let me",
-                    "I cannot",
-                    "I'm unable",
-                    "The file appears",
-                    "I don't have",
-                    "Unfortunately",
-                    "I apologize",
-                ]
-                first_line = merged_content.split("\n")[0] if merged_content else ""
-                if any(pattern in first_line for pattern in natural_language_patterns):
-                    debug_warning(
-                        MODULE,
-                        f"AI returned natural language instead of code for {task.file_path}: {first_line[:100]}",
-                    )
-                    return ParallelMergeResult(
-                        file_path=task.file_path,
-                        merged_content=None,
-                        success=False,
-                        error=f"AI returned explanation instead of code: {first_line[:80]}...",
-                    )
-
-                # VALIDATION: Run syntax check on the merged content
-                is_valid, syntax_error = _validate_merged_syntax(
-                    task.file_path, merged_content, task.project_dir
                 )
-                if not is_valid:
-                    debug_warning(
-                        MODULE,
-                        f"AI merge produced invalid syntax for {task.file_path}: {syntax_error}",
-                    )
-                    return ParallelMergeResult(
-                        file_path=task.file_path,
-                        merged_content=None,
-                        success=False,
-                        error=f"AI merge produced invalid syntax: {syntax_error}",
-                    )
 
-                debug(MODULE, f"AI merged {task.file_path} successfully")
+            # Haiku failed, retry with Sonnet (more capable model)
+            debug_warning(
+                MODULE,
+                f"Haiku merge failed for {task.file_path}: {error}, retrying with Sonnet...",
+            )
+            print(muted(f"    Retrying {task.file_path} with more capable AI model..."))
+            success, merged_content, error = await _attempt_ai_merge(
+                task,
+                prompt,
+                model=MERGE_CAPABLE_MODEL,
+                max_thinking_tokens=MERGE_COMPLEX_THINKING,
+            )
+
+            if success and merged_content:
+                debug(MODULE, f"Sonnet merged {task.file_path} successfully")
                 return ParallelMergeResult(
                     file_path=task.file_path,
                     merged_content=merged_content,
@@ -1709,11 +1806,16 @@ async def _merge_file_with_ai_async(
                     was_auto_merged=False,
                 )
             else:
+                # Both models failed
+                debug_error(
+                    MODULE,
+                    f"Both AI models failed to merge {task.file_path}: {error}",
+                )
                 return ParallelMergeResult(
                     file_path=task.file_path,
                     merged_content=None,
                     success=False,
-                    error="AI returned empty response",
+                    error=f"AI merge failed: {error}",
                 )
 
         except Exception as e:

apps/backend/core/workspace/__init__.py

@@ -28,6 +28,8 @@ _workspace_module = importlib.util.module_from_spec(_spec)
 _spec.loader.exec_module(_workspace_module)
 merge_existing_build = _workspace_module.merge_existing_build
 _run_parallel_merges = _workspace_module._run_parallel_merges
+AI_MERGE_SYSTEM_PROMPT = _workspace_module.AI_MERGE_SYSTEM_PROMPT
+_build_merge_prompt = _workspace_module._build_merge_prompt
 
 # Models and Enums
 # Display Functions
@@ -107,6 +109,8 @@ __all__ = [
     # Merge Operations (from workspace.py)
     "merge_existing_build",
     "_run_parallel_merges",  # Private but used internally
+    "AI_MERGE_SYSTEM_PROMPT",  # System prompt for AI merge (ACS-194)
+    "_build_merge_prompt",  # Internal prompt builder (ACS-194)
     # Models
     "WorkspaceMode",
     "WorkspaceChoice",

apps/backend/core/workspace/display.py

@@ -149,7 +149,14 @@ def print_merge_success(
 
 
 def print_conflict_info(result: dict) -> None:
-    """Print information about conflicts that occurred during merge."""
+    """Print information about conflicts that occurred during merge.
+
+    The conflicts can be either:
+    - List of strings (file paths) - for git conflict markers
+    - List of dicts with keys: file, reason, severity - for AI merge failures
+    """
+    import shlex
+
     from ui import highlight, muted, warning
 
     conflicts = result.get("conflicts", [])
@@ -162,12 +169,57 @@ def print_conflict_info(result: dict) -> None:
             f"  {len(conflicts)} file{'s' if len(conflicts) != 1 else ''} had conflicts:"
         )
     )
-    for conflict_file in conflicts:
+
-        print(f"    {highlight(conflict_file)}")
+    # Extract file paths from conflicts (handle both strings and dicts)
+    file_paths: list[str] = []
+    has_marker_conflicts = False
+    has_ai_conflicts = False
+    for conflict in conflicts:
+        if isinstance(conflict, str):
+            # Simple string - just the file path
+            file_paths.append(conflict)
+            print(f"    {highlight(conflict)}")
+            has_marker_conflicts = True
+        elif isinstance(conflict, dict):
+            # Dict with file, reason, severity keys
+            file_path = conflict.get("file", "unknown")
+            reason = conflict.get("reason", "")
+            severity = conflict.get("severity", "medium")
+
+            # Add severity indicator
+            severity_icon = ""
+            if severity == "critical":
+                severity_icon = "⛔"
+            elif severity == "high":
+                severity_icon = "🔴"
+            elif severity == "medium":
+                severity_icon = "🟡"
+
+            file_paths.append(file_path)
+            # Only add space if icon is present (no trailing space when empty)
+            icon_with_space = f" {severity_icon}" if severity_icon else ""
+            print(f"    {highlight(file_path)}{icon_with_space}")
+            if reason:
+                print(f"      {muted(reason)}")
+            has_ai_conflicts = True
+
     print()
-    print(muted("  These files have conflict markers (<<<<<<< =======  >>>>>>>)"))
+    if has_marker_conflicts:
-    print(muted("  Review and resolve them, then run:"))
+        print(
-    print(f"    git add {' '.join(conflicts)}")
+            muted(
+                "  Some files may contain conflict markers (<<<<<<< =======  >>>>>>>)."
+            )
+        )
+    if has_ai_conflicts:
+        print(
+            muted(
+                "  Some files could not be auto-merged; review and resolve as needed."
+            )
+        )
+    print(muted("  Then run:"))
+    # Quote paths and dedupe while preserving order
+    quoted = " ".join(shlex.quote(p) for p in dict.fromkeys(file_paths))
+    print(f"    git add {quoted}")
     print("    git commit")
     print()
 

apps/backend/core/worktree.py

@@ -614,11 +614,27 @@ class WorktreeManager:
         else:
             print(f"Merging {info.branch} into {self.base_branch}...")
 
-        # Switch to base branch in main project
+        # Switch to base branch in main project, but skip if already on it
-        result = self._run_git(["checkout", self.base_branch])
+        # This avoids triggering git hooks unnecessarily
-        if result.returncode != 0:
+        current_branch = self._get_current_branch()
-            print(f"Error: Could not checkout base branch: {result.stderr}")
+        if current_branch != self.base_branch:
-            return False
+            result = self._run_git(["checkout", self.base_branch])
+            if result.returncode != 0:
+                # Check if this is a hook failure vs actual checkout failure
+                # Hook failures still change the branch but return non-zero
+                new_branch = self._get_current_branch()
+                if new_branch == self.base_branch:
+                    # Branch did change - likely a hook failure, continue with merge
+                    stderr_msg = result.stderr[:100] if result.stderr else "<no stderr>"
+                    debug_warning(
+                        "worktree",
+                        f"Checkout succeeded but hook returned non-zero: {stderr_msg}",
+                    )
+                else:
+                    # Actual checkout failure
+                    stderr_msg = result.stderr[:100] if result.stderr else "<no stderr>"
+                    print(f"Error: Could not checkout base branch: {stderr_msg}")
+                    return False
 
         # Merge the spec branch
         merge_args = ["merge", "--no-ff", info.branch]

tests/test_merge_ai_resolver.py

@@ -207,3 +207,43 @@ class TestStatsTracking:
 
         stats = mock_ai_resolver.stats
         assert stats["calls_made"] == 3
+
+
+class TestAIMergeRetryMechanism:
+    """Tests for AI merge retry mechanism with fallback (ACS-194)."""
+
+    def test_ai_merge_system_prompt_enhanced(self):
+        """AI merge system prompt is enhanced for better success rate (ACS-194)."""
+        # Import from workspace package (standard import)
+        from core.workspace import AI_MERGE_SYSTEM_PROMPT
+
+        # Verify the system prompt includes enhanced guidance
+        assert "expert code merge assistant" in AI_MERGE_SYSTEM_PROMPT
+        assert "3-way merges" in AI_MERGE_SYSTEM_PROMPT
+        # Note: The prompt focuses on "intelligently" and "task's intent" not "semantic understanding"
+        assert "intelligently" in AI_MERGE_SYSTEM_PROMPT.lower()
+        assert "task's intent" in AI_MERGE_SYSTEM_PROMPT or "task intent" in AI_MERGE_SYSTEM_PROMPT
+        assert "best-effort" in AI_MERGE_SYSTEM_PROMPT
+        # Verify key merge strategies are documented
+        assert "Preserve all functional changes" in AI_MERGE_SYSTEM_PROMPT
+        assert "Combine independent changes" in AI_MERGE_SYSTEM_PROMPT
+        assert "Resolve overlapping changes" in AI_MERGE_SYSTEM_PROMPT
+
+    def test_build_merge_prompt_includes_task_context(self):
+        """Merge prompt builder includes task context (ACS-194)."""
+        # Import from workspace package (standard import)
+        from core.workspace import _build_merge_prompt
+
+        # Test that prompt includes task name
+        prompt = _build_merge_prompt(
+            "test.py",
+            "base content",
+            "main content",
+            "worktree content",
+            "my-task-spec",
+        )
+
+        assert "my-task-spec" in prompt
+        assert "OURS" in prompt
+        assert "THEIRS" in prompt
+        assert "BASE" in prompt or "common ancestor" in prompt

tests/test_workspace.py

@@ -13,7 +13,6 @@ Tests the workspace.py module functionality including:
 import subprocess
 import pytest
 from pathlib import Path
-from unittest.mock import patch, MagicMock
 
 from workspace import (
     WorkspaceMode,
@@ -394,3 +393,139 @@ class TestPerSpecWorktreeName:
         # New path: .auto-claude/worktrees/tasks/{spec_name}
         assert "worktrees" in str(working_dir)
         assert working_dir.parent.name == "tasks"
+
+
+class TestConflictInfoDisplay:
+    """Tests for conflict info display function (ACS-179)."""
+
+    def test_print_conflict_info_with_string_list(self, capsys):
+        """print_conflict_info handles string list of file paths (ACS-179)."""
+        from core.workspace.display import print_conflict_info
+
+        result = {
+            "conflicts": ["file1.txt", "file2.py", "file3.js"]
+        }
+
+        print_conflict_info(result)
+
+        captured = capsys.readouterr()
+        assert "3 file" in captured.out
+        assert "file1.txt" in captured.out
+        assert "file2.py" in captured.out
+        assert "file3.js" in captured.out
+        assert "git add" in captured.out
+
+    def test_print_conflict_info_with_dict_list(self, capsys):
+        """print_conflict_info handles dict list with file/reason/severity (ACS-179)."""
+        from core.workspace.display import print_conflict_info
+
+        result = {
+            "conflicts": [
+                {"file": "file1.txt", "reason": "Syntax error", "severity": "high"},
+                {"file": "file2.py", "reason": "Merge conflict", "severity": "medium"},
+                {"file": "file3.js", "reason": "Unknown error", "severity": "low"},
+            ]
+        }
+
+        print_conflict_info(result)
+
+        captured = capsys.readouterr()
+        assert "3 file" in captured.out
+        assert "file1.txt" in captured.out
+        assert "file2.py" in captured.out
+        assert "file3.js" in captured.out
+        assert "Syntax error" in captured.out
+        assert "Merge conflict" in captured.out
+        # Verify severity emoji indicators
+        assert "🔴" in captured.out  # High severity
+        assert "🟡" in captured.out  # Medium severity
+
+    def test_print_conflict_info_mixed_formats(self, capsys):
+        """print_conflict_info handles mixed string and dict conflicts (ACS-179)."""
+        from core.workspace.display import print_conflict_info
+
+        result = {
+            "conflicts": [
+                "simple-file.txt",
+                {"file": "complex-file.py", "reason": "AI merge failed", "severity": "high"},
+            ]
+        }
+
+        print_conflict_info(result)
+
+        captured = capsys.readouterr()
+        assert "2 file" in captured.out
+        assert "simple-file.txt" in captured.out
+        assert "complex-file.py" in captured.out
+        assert "AI merge failed" in captured.out
+
+
+class TestMergeErrorHandling:
+    """Tests for merge error handling (ACS-163)."""
+
+    def test_merge_failure_returns_false_immediately(self, temp_git_repo: Path):
+        """Failed merge returns False without falling through (ACS-163)."""
+        manager = WorktreeManager(temp_git_repo)
+        manager.setup()
+
+        # Create a worktree with changes
+        worker_info = manager.create_worktree("worker-spec")
+        (worker_info.path / "worker-file.txt").write_text("worker content")
+        subprocess.run(["git", "add", "."], cwd=worker_info.path, capture_output=True)
+        subprocess.run(
+            ["git", "commit", "-m", "Worker commit"],
+            cwd=worker_info.path, capture_output=True
+        )
+
+        # Create a conflicting change on main
+        subprocess.run(["git", "checkout", manager.base_branch], cwd=temp_git_repo, capture_output=True)
+        (temp_git_repo / "worker-file.txt").write_text("main content")
+        subprocess.run(["git", "add", "."], cwd=temp_git_repo, capture_output=True)
+        subprocess.run(
+            ["git", "commit", "-m", "Main commit"],
+            cwd=temp_git_repo, capture_output=True
+        )
+
+        # Merge should fail (conflict) and return False
+        # This tests the fix for ACS-163 where failed merge would fall through
+        result = manager.merge_worktree("worker-spec", delete_after=False)
+
+        # Should return False on merge conflict
+        assert result is False
+
+        # Verify side effects: base branch content is unchanged
+        subprocess.run(["git", "checkout", manager.base_branch], cwd=temp_git_repo, capture_output=True)
+        base_content = (temp_git_repo / "worker-file.txt").read_text()
+        assert base_content == "main content", "Base branch should be unchanged after failed merge"
+
+        # Verify worktree still exists (delete_after=False)
+        assert worker_info.path.exists(), "Worktree should still exist after failed merge"
+
+        # Verify worktree content is unchanged
+        worktree_content = (worker_info.path / "worker-file.txt").read_text()
+        assert worktree_content == "worker content", "Worktree content should be unchanged"
+
+    def test_merge_success_returns_true(self, temp_git_repo: Path):
+        """Successful merge returns True (ACS-163 verification)."""
+        manager = WorktreeManager(temp_git_repo)
+        manager.setup()
+
+        # Create a worktree with non-conflicting changes
+        worker_info = manager.create_worktree("worker-spec")
+        (worker_info.path / "worker-file.txt").write_text("worker content")
+        subprocess.run(["git", "add", "."], cwd=worker_info.path, capture_output=True)
+        subprocess.run(
+            ["git", "commit", "-m", "Worker commit"],
+            cwd=worker_info.path, capture_output=True
+        )
+
+        # Merge should succeed
+        result = manager.merge_worktree("worker-spec", delete_after=False)
+
+        assert result is True
+
+        # Verify the file was merged into base branch
+        subprocess.run(["git", "checkout", manager.base_branch], cwd=temp_git_repo, capture_output=True)
+        assert (temp_git_repo / "worker-file.txt").exists(), "Merged file should exist in base branch"
+        merged_content = (temp_git_repo / "worker-file.txt").read_text()
+        assert merged_content == "worker content", "Merged file should have worktree content"

tests/test_worktree.py

@@ -171,6 +171,34 @@ class TestWorktreeCommitAndMerge:
         subprocess.run(["git", "checkout", manager.base_branch], cwd=temp_git_repo, capture_output=True)
         assert (temp_git_repo / "worker-file.txt").exists()
 
+    def test_merge_worktree_already_on_target_branch(self, temp_git_repo: Path):
+        """merge_worktree succeeds when already on target branch (ACS-174)."""
+        manager = WorktreeManager(temp_git_repo)
+        manager.setup()
+
+        # Ensure we're on the base branch
+        result = subprocess.run(["git", "checkout", manager.base_branch], cwd=temp_git_repo, capture_output=True)
+        assert result.returncode == 0, f"Checkout failed: {result.stderr}"
+
+        # Create a worktree with changes
+        worker_info = manager.create_worktree("worker-spec")
+        (worker_info.path / "worker-file.txt").write_text("worker content")
+        result = subprocess.run(["git", "add", "."], cwd=worker_info.path, capture_output=True)
+        assert result.returncode == 0, f"Git add failed: {result.stderr}"
+        result = subprocess.run(
+            ["git", "commit", "-m", "Worker commit"],
+            cwd=worker_info.path, capture_output=True
+        )
+        assert result.returncode == 0, f"Commit failed: {result.stderr}"
+
+        # Already on target branch, should skip checkout and still merge successfully
+        result = manager.merge_worktree("worker-spec", delete_after=False)
+
+        assert result is True
+
+        # Verify file is in main branch
+        assert (temp_git_repo / "worker-file.txt").exists()
+
 
 class TestChangeTracking:
     """Tests for tracking changes in worktrees."""