$ hg init repo
  $ cd repo
  $ echo This is file a1 > a
  $ hg add a
  $ hg commit -m "commit #0"
  $ ls -A
  .hg
  a
  $ echo This is file b1 > b
  $ hg add b
  $ hg commit -m "commit #1"
  $ hg co 0
  0 files updated, 0 files merged, 1 files removed, 0 files unresolved

B should disappear

  $ ls -A
  .hg
  a