First fetch failed

In the same state, a fresh clone after init, the first fetch fails, e.g. without network. merge never fetches, so it can only tell a fetched upstream from one never fetched here. A failed fetch leaves the upstream as unknown as before, and merge still says so, rather than that the upstream has no branch and there is nothing to merge.

Output

setup.bash builds this state:

$ build_scenario scenario_init_then_cloned https://git.example.com/a.git

GIT_ALLOW_PROTOCOL=none lets Git use no protocol at all, so the fetch fails as it would without network:

$ GIT_ALLOW_PROTOCOL=none git splice fetch lib/a
fatal: transport 'file' not allowed
!!   lib/a fetch failed
!!   Failed: lib/a
[1]

$ git splice merge lib/a
??   lib/a: not fetched yet -- run 'git splice fetch lib/a' first
!!   Failed: lib/a
[1]

Once a fetch succeeds, merge knows the upstream, and that it has just the two commits the folder has already:

$ git splice fetch lib/a
ok   lib/a fetched

$ git splice merge lib/a
ok   lib/a: nothing to merge