svn reintegrate causing merge conflicts

I am encountering an issue with "svn merge --reintegrate" when doing
round-trip branch-trunk merges. Yes, I know these are problematic, but
we don't have problems with them except for this one case.

The general scenario is:
  1. Create a new file on the branch.
  2. svn merge --reintegrate to the trunk.
  3. Modify the file on the branch.
  4. svn merge --reintegrate to the trunk.

The second merge will raise the file as a tree-conflict: "local add,
incoming add upon merge".

If a --record-only trunk-to-branch merge is done of the revision created
by step #2 above, this tree-conflict is avoided. (We normally do this
kind of record-only merge only when merging trunk changes to the branch
and not in this scenario).

"svn merge ^/trunk ^/branch" for step #4 doesn't have this problem. (I
find this interesting, but perhaps it's perfectly logical.)

I see this behavior with both 1.6.6 and 1.6.9. Is this a bug?

I've attached a script that reproduces the scenario.

-- 
David Rothenberger  ----  daveroth_at_acm.org
"It takes all sorts of in & out-door schooling to get adapted
to my kind of fooling"
                 -- R. Frost