Desiring to use KDiff3 as a conflict resolution tool for TortoiseSVN, I followed the instructions here and here to configure TortoiseSVN to use KDiff3. So my merge tool options in TortoiseSVN:
C:\Program Files (x86)\KDiff3\kdiff3.exe %base %mine %theirs -o %merged --L1 %bname --L2 %yname --L3 %tname
Conflicts may be detected during the merge. If they hit the Edit Conflict button to launch KDiff3 and negotiate merge conflicts.
However, when you save the merge, the result is saved in a temporary file in the .svn folders, and not in the actual working file C:\projects\my-new-project\src\mvags1.mxml. A temporary location can also be seen in the KDiff3 output window.

Am I setting something up incorrectly or was expecting KDiff3 to work incorrectly with TortoiseSVN?
I am using TortoiseSVN 1.7.5 and KDiff3 0.9.96.
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