Nope. It has something it calls "merge", but it's really just "apply the
diff from the common base to the other end".
IOW, if "a" is your common ancestor, and "b1" and "b2" are the branches,
it's literally
diff a b1 | patch b2
and not actually a real 3-way merge.
As to why git uses "merge" - I have this strong memory of having seen
machines that had one but not the other, and that, along with the fact
that I've used "merge" personally, is why we call "merge" rather than
diff3.
In Linux systems, "merge" usually comes with the RCS package, and "diff3"
is usually from "diffutils". It may be that "diff3" is more common. I'm
not sure what the history is, and what the situation would tend to be like
on other systems..
Linus
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