diff --git a/hgext3rd/fbsparse.py b/hgext3rd/fbsparse.py
--- a/hgext3rd/fbsparse.py
+++ b/hgext3rd/fbsparse.py
@@ -79,7 +79,10 @@
         actions, diverge, renamedelete = orig(repo, wctx, mctx, ancestors,
                                               branchmerge, *arg, **kwargs)
 
-        if not util.safehasattr(repo, 'sparsematch'):
+        # If the working context is inmemory (virtual), there's no need to apply
+        # the user's sparse rules at all (and in fact doing so would cause
+        # unexpected behavior in the real working copy).
+        if not util.safehasattr(repo, 'sparsematch') or wctx.isinmemory():
             return actions, diverge, renamedelete
 
         files = set()
diff --git a/hgext3rd/sparse.py b/hgext3rd/sparse.py
--- a/hgext3rd/sparse.py
+++ b/hgext3rd/sparse.py
@@ -92,7 +92,10 @@
         actions, diverge, renamedelete = orig(repo, wctx, mctx, ancestors,
                                               branchmerge, *arg, **kwargs)
 
-        if not util.safehasattr(repo, 'sparsematch'):
+        # If the working context is inmemory (virtual), there's no need to apply
+        # the user's sparse rules at all (and in fact doing so would cause
+        # unexpected behavior in the real working copy).
+        if not util.safehasattr(repo, 'sparsematch') or wctx.isinmemory():
             return actions, diverge, renamedelete
 
         files = set()