Define and use nullrev (revision of nullid) instead of -1.
#!/bin/sh
hg init
mkdir alpha
touch alpha/one
mkdir beta
touch beta/two
hg add alpha/one beta/two
hg ci -m "start" -d "1000000 0"
echo 1 > alpha/one
echo 2 > beta/two
echo EVERYTHING
hg diff --nodates
echo BETA ONLY
hg diff --nodates beta
echo INSIDE BETA
cd beta
hg diff --nodates .