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I'm using Sourcetree v4.1.2 and I'm seeing this behavior when merging files. If I run from Terminal the `git mergetool path-to-file` command, FileMerge launches fine, I resolve conflicts and conflict markers are removed when I quit FileMerge and execution returns to Terminal.
At the beginning of this issue I thought it was Filemerge (like apple fruit, time passes and gets rotten, v 2.11 crashes when I edit a merged change), but then it occurred to me to launch mergetool from terminal and conflict markers are no longer left in the file after FileMerge quits, so clearly this is not a FileMerge issue or it's something related to how SourceTree passes ancestors and conflicted files to FileMerge.
I haven't tried merging 2 conflicted files without SourceTree but from Terminal as I described it above.