Why is the merge tool disabled in Eclipse for a EGit-managed project?

Question

As per the EGit User Guide, to use the merge tool, one should right-click on the resource with a merge conflict and then select Team > Merge Tool

Answer 1

This happens if you tried to push changes to a remote and there were merges required from the remote. It fails with 'not FF' but also simultaneously detects the conflict. Don't ask me why it doesn't mark the whole project as conflicted at this point.

Open the Synchronize tab, right-click the project and select 'merge'. This immediately fails because of the conflicting file, and it switches on the conflict icon label for the project and enables the 'merge tool' option.

This is for EGit 4.0.3 in Eclipse Mars.