Change use of global sys.stdout, sys.stdin os.environ to a hgrequest object. Note: also change hgrequest.write(str(thing)) to hgrequest.write(thing), people should make sure they write strings.

#!/bin/sh

hg init
echo 123 > a
hg add a
hg commit -m "first" -d "0 0" a
mkdir sub
echo 321 > sub/b
hg add sub/b
hg commit -m "second" -d "0 0" sub/b
cat sub/b
hg co 0
cat sub/b
ls sub

true