Change asciidoc backend to more recent name. The latest asciidoc doesn't have an 'html' backend. 'html' was last valid with version 6 ( 2005-1-28). Current options are xhtml11, or html4, with xhtml11 by default.

#!/bin/sh

mkdir a
cd a
hg init
echo 123 > a
hg add a
hg commit -m "a" -u a -d "0 0"

cd ..
mkdir b
cd b
hg init
echo 321 > b
hg add b
hg commit -m "b" -u b -d "0 0"

hg pull ../a
hg heads