merge: conflicts are not always reported in case of change and insert in current and next

Merging the following: "abcefhik", "abdefgijk","abcdehijk"
currently does not produce any conflict, where it should in fact produces two conflicts:
1. on the "c" that has been changed on "d" on one case, and kept on the other one with a "d" added
2. on the "f" which has been removed on one case, and kept on the other one but with a "g" replacing the "h" afterwards.