diff --git a/mercurial/filemerge.py b/mercurial/filemerge.py
--- a/mercurial/filemerge.py
+++ b/mercurial/filemerge.py
@@ -376,7 +376,7 @@ def filemerge(repo, mynode, orig, fcd, f
 
     ui.debug("my %s other %s ancestor %s\n" % (fcd, fco, fca))
 
-    markerstyle = ui.config('ui', 'mergemarkers', 'detailed')
+    markerstyle = ui.config('ui', 'mergemarkers', 'basic')
     if markerstyle == 'basic':
         formattedlabels = _defaultconflictlabels
     else:
diff --git a/mercurial/help/config.txt b/mercurial/help/config.txt
--- a/mercurial/help/config.txt
+++ b/mercurial/help/config.txt
@@ -1215,11 +1215,11 @@ User interface controls.
     For configuring merge tools see the ``[merge-tools]`` section.
 
 ``mergemarkers``
-    Sets the merge conflict marker label styling. The default ``detailed``
+    Sets the merge conflict marker label styling. The ``detailed``
     style uses the ``mergemarkertemplate`` setting to style the labels.
     The ``basic`` style just uses 'local' and 'other' as the marker label.
     One of ``basic`` or ``detailed``.
-    Default is ``detailed``.
+    Default is ``basic``.
 
 ``mergemarkertemplate``
     The template used to print the commit description next to each conflict
@@ -1227,6 +1227,13 @@ User interface controls.
     format.
     Defaults to showing the hash, tags, branches, bookmarks, author, and
     the first line of the commit description.
+    You have to pay attention to encodings of managed files, if you
+    use non-ASCII characters in tags, branches, bookmarks, author
+    and/or commit descriptions. At template expansion, non-ASCII
+    characters use the encoding specified by ``--encoding`` global
+    option, ``HGENCODING`` or other locale setting environment
+    variables. The difference of encoding between merged file and
+    conflict markers causes serious problem.
 
 ``portablefilenames``
     Check for portable filenames. Can be ``warn``, ``ignore`` or ``abort``.
diff --git a/tests/run-tests.py b/tests/run-tests.py
--- a/tests/run-tests.py
+++ b/tests/run-tests.py
@@ -648,6 +648,7 @@ class Test(unittest.TestCase):
         hgrc.write('[ui]\n')
         hgrc.write('slash = True\n')
         hgrc.write('interactive = False\n')
+        hgrc.write('mergemarkers = detailed\n')
         hgrc.write('[defaults]\n')
         hgrc.write('backout = -d "0 0"\n')
         hgrc.write('commit = -d "0 0"\n')
diff --git a/tests/test-basic.t b/tests/test-basic.t
--- a/tests/test-basic.t
+++ b/tests/test-basic.t
@@ -7,6 +7,7 @@ Create a repository:
   defaults.tag=-d "0 0"
   ui.slash=True
   ui.interactive=False
+  ui.mergemarkers=detailed
   $ hg init t
   $ cd t
 
diff --git a/tests/test-commandserver.py.out b/tests/test-commandserver.py.out
--- a/tests/test-commandserver.py.out
+++ b/tests/test-commandserver.py.out
@@ -80,6 +80,7 @@ defaults.shelve=--date "0 0"
 defaults.tag=-d "0 0"
 ui.slash=True
 ui.interactive=False
+ui.mergemarkers=detailed
 ui.foo=bar
 ui.nontty=true
  runcommand init foo
@@ -90,6 +91,7 @@ defaults.shelve=--date "0 0"
 defaults.tag=-d "0 0"
 ui.slash=True
 ui.interactive=False
+ui.mergemarkers=detailed
 ui.nontty=true
 
 testing hookoutput: