Mercurial does not allow nested repositories, but there is at least one reason for them:
Imagine that you are working in a project: /MyProject. In this folder you put everything: code, documentation, tests, etc.
You want to backup your work because it is very important, so you create a repository for /MyProject. Then, overtime you use bundles to save the evolution of /MyProject and back up them in a USB flash memory so that you can recover everything just in case your hard drive breaks.
Remember that /MyProject contains everything. And among all those things, there are the main code and some auxiliary projects. You also want to track the progress of an auxiliary project that is in /MyProject/AuxiliaryProject, so you use Mercurial to track its evolution.
Also, you want to have a separate repository for the main code: /MyProject/Main
In this situation you want nested repositories: one big one for being able to back-up everything using bundles and child repositories for managing each subproject.
I think Mercurial should give the user several options when initializing a repository. For example:
- ignore nested repositories
- include nested repositories but ignoring .Hg folders (i.e. act as if there were no nested repositories but do not ignore the information contained in the nested respositories).
- include nested repositories and also include .Hg folders (makes sense for back-up purposes)
--------- Edit:
Subrepositories is a feature that is work in progress:
https://www.mercurial-scm.org/wiki/subrepos
Also, there is an extension named "forest" that might become obsolete in the future:
https://www.mercurial-scm.org/ForestExtension