Comment 3 for bug 344013

That's a separate issue you are trying to resolve. This bug is purely that if a directory is conflicted in the manner described, and you manually delete it, it should be automatically resolved by "bzr resolve" rather than "bzr resolve path". More specifically, from my cursory look, it seems that the function workingtree:auto_resolve() should handle conflict.typestrings of type 'path conflict' (generated by Merge3Merger:cook_conflicts()), as well as 'text conflict'.

If I had more python experience, I would do it myself :(