diff --git a/hgext/fsmonitor/__init__.py b/hgext/fsmonitor/__init__.py
--- a/hgext/fsmonitor/__init__.py
+++ b/hgext/fsmonitor/__init__.py
@@ -73,6 +73,8 @@
 
     [fsmonitor]
     warn_update_file_count = (integer)
+    # or when mercurial is built with rust support
+    warn_update_file_count_rust = (integer)
 
 If ``warn_when_unused`` is set and fsmonitor isn't enabled, a warning will
 be printed during working directory updates if this many files will be
diff --git a/mercurial/configitems.py b/mercurial/configitems.py
--- a/mercurial/configitems.py
+++ b/mercurial/configitems.py
@@ -793,6 +793,9 @@
     b'fsmonitor', b'warn_update_file_count', default=50000,
 )
 coreconfigitem(
+    b'fsmonitor', b'warn_update_file_count_rust', default=400000,
+)
+coreconfigitem(
     b'help', br'hidden-command\..*', default=False, generic=True,
 )
 coreconfigitem(
diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -1698,6 +1698,15 @@
     fsmonitorthreshold = repo.ui.configint(
         b'fsmonitor', b'warn_update_file_count'
     )
+    # avoid cycle dirstate -> sparse -> merge -> dirstate
+    from . import dirstate
+
+    if dirstate.rustmod is not None:
+        # When using rust status, fsmonitor becomes necessary at higher sizes
+        fsmonitorthreshold = repo.ui.configint(
+            b'fsmonitor', b'warn_update_file_count_rust',
+        )
+
     try:
         # avoid cycle: extensions -> cmdutil -> merge
         from . import extensions
diff --git a/tests/test-clone.t b/tests/test-clone.t
--- a/tests/test-clone.t
+++ b/tests/test-clone.t
@@ -1241,6 +1241,7 @@
   $ cat >> $HGRCPATH << EOF
   > [fsmonitor]
   > warn_update_file_count = 2
+  > warn_update_file_count_rust = 2
   > EOF
 
 We should see a warning about no fsmonitor on supported platforms