Hg does support merging between branches of course and being changeset-based, it is very efficient, sending only the changesets not already present in the target repository.

When merging, the changesets are merged first in a temporary head or internal branch in the repository. Then, it is merged with the working directory data either automatically (through hg pull -u) or manually (with hg update or hg merge).

That is done this way to reduce potental conflicts because upstream code is less likely to generate conflicts than local modifications.

You can also have multiples heads within an Hg repo without merging and it could be used for internal branches without going through a complete clone.

See [“VCSFeatureBranch”] and [“VCSFeatureVendorBranch”]