Hi Daniel,
After merge to trunk, file on disk has proper name: "file With Space.txt".
Moreover after commit, file on my disk still has proper name,
but when I Checkout to other directory it will have name 
'file%20With%20Space.txt'.

Log after second commit says exactly what was happened:

A /trunk/file%20With%20Space.txt (from /branches/1.0/file With Space.txt:3)

File in trunk was created from file in branch, but the filename was changed.
This is unwanted behavior.

Bartosz

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