diff -r d86908050375 -r 96aa3a68d3b5 mercurial/merge.py
--- a/mercurial/merge.py	Thu Oct 21 11:21:21 2021 +0200
+++ b/mercurial/merge.py	Thu Oct 21 17:25:41 2021 +0200
@@ -1714,6 +1714,10 @@
             progress.increment(item=f, total=numupdates)
             ms.resolve(f, wctx)
 
+    except error.InterventionRequired:
+        # If the user has merge.on-failure=halt, catch the error and close the
+        # merge state "properly".
+        pass
     finally:
         ms.commit()