I have spotted the biggest bottleneck in "bdiff.c". Actually it was pretty easy to find after I recompiled the python interpreter and mercurial for profiling. In "bdiff.c" function "equatelines" allocates the minimum hash table size, which can lead to tons of collisions. I introduced an "overcommit" factor of 16, this is, I allocate 16 times more memory than the minimum value. Overcommiting 128 times does not improve the performance over the 16-times case.

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#!/bin/sh

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hg init

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echo a > a

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hg ci -Ama -d'0 0'

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mkdir b

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echo a > b/a

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hg ci -Amb -d'1 0'

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hg manifest

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hg manifest -v

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hg manifest --debug

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hg manifest -r 0

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hg manifest -r 1

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hg manifest -r tip

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echo % should fail

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hg manifest -r 2

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hg manifest -r tip tip

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hg manifest tip