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+---
+name: "Mergemaster should resolve merge conflicts instead of leaving conflict markers on master"
+---
+
+# Story 119: Mergemaster should resolve merge conflicts instead of leaving conflict markers on master
+
+## Problem
+
+When mergemaster squash-merges a feature branch that conflicts with current master, conflict markers end up committed to master. This breaks the frontend build and requires manual intervention.
+
+## Root Cause
+
+There is a race condition between `run_squash_merge` and the file watcher:
+
+1. `git merge --squash` runs on the main working tree
+2. The squash brings `.story_kit/work/` files from the feature branch (e.g. story moved to `2_current`)
+3. The watcher detects these file changes and auto-commits — including any conflict markers in frontend/server files
+4. `run_squash_merge` checks the exit status and aborts, but the watcher already committed the broken state
+
+The merge tool itself does the right thing (aborts on conflicts at `agents.rs:2157-2171`), but the watcher races it.
+
+## Proposed Solution: Merge-Queue Branch
+
+1. Create a `merge-queue` branch that always tracks master
+2. Mergemaster performs squash-merges on `merge-queue` instead of master
+3. If the merge is clean and gates pass, fast-forward master to merge-queue
+4. If conflicts occur, the watcher does not care (it only watches the main worktree)
+5. Mergemaster can resolve conflicts on the merge-queue branch without affecting master
+6. If resolution fails, reset merge-queue to master and report the conflict
+
+## Alternative: Pause Watcher During Merges
+
+Add a lock/pause mechanism to the watcher that `merge_agent_work` acquires before running `git merge --squash`. The watcher skips auto-commits while the lock is held. Simpler but less robust.
+
+## Also Update Mergemaster Prompt
+
+- Remove the instruction to NOT resolve conflicts
+- Instead instruct mergemaster to resolve simple conflicts (e.g. both branches adding code at same location)
+- For complex conflicts (semantic changes to the same logic), still report to human
+
+## Key Files
+
+- `server/src/agents.rs` — `run_squash_merge` (lines 2136-2199), `merge_agent_work` (lines 992-1066)
+- `server/src/http/mcp.rs` — `tool_merge_agent_work` (lines 1392-1425)
+- `server/src/io/watcher.rs` — file watcher that races with the merge
+- `.story_kit/project.toml` — mergemaster prompt (lines 210-232)
+
+## Acceptance Criteria
+
+- [ ] Merge conflicts never leave conflict markers on master
+- [ ] Mergemaster resolves simple additive conflicts automatically
+- [ ] Complex conflicts are reported clearly without breaking master
+- [ ] Frontend build stays clean throughout the merge process
+- [ ] Existing tests pass