diff --git a/mercurial/ui.py b/mercurial/ui.py
--- a/mercurial/ui.py
+++ b/mercurial/ui.py
@@ -664,11 +664,18 @@
             msg %= (section, name, pycompat.bytestr(default))
             self.develwarn(msg, 2, b'warn-config-default')
 
+        candidates = []
+        config = self._data(untrusted)
         for s, n in alternates:
-            candidate = self._data(untrusted).get(s, n, None)
+            candidate = config.get(s, n, None)
             if candidate is not None:
-                value = candidate
-                break
+                candidates.append((s, n, candidate))
+        if candidates:
+
+            def level(x):
+                return config.level(x[0], x[1])
+
+            value = max(candidates, key=level)[2]
 
         if self.debugflag and not untrusted and self._reportuntrusted:
             for s, n in alternates:
diff --git a/tests/test-config.t b/tests/test-config.t
--- a/tests/test-config.t
+++ b/tests/test-config.t
@@ -474,15 +474,12 @@
 When both are defined, the value for any of them defined within the highest
 level config source (read later) should win.
 
-BROKEN: currently not the case.
-
   $ HGRCPATH="file-A.rc" hg log -r .
   value-A
   $ HGRCPATH="file-B.rc" hg log -r .
   value-B
   $ HGRCPATH="file-A.rc:file-B.rc" hg log -r .
-  value-A (known-bad-output !)
-  value-B (missing-correct-output !)
+  value-B
 
 Alias and include
 -----------------
@@ -491,15 +488,12 @@
 See the case above for details about the two config options used.
 
   $ HGRCPATH="file-C.rc" hg log -r .
-  value-included (known-bad-output !)
-  value-C (missing-correct-output !)
+  value-C
   $ HGRCPATH="file-D.rc" hg log -r .
-  value-D (known-bad-output !)
-  value-included (missing-correct-output !)
+  value-included
 
 command line override
 ---------------------
 
   $ HGRCPATH="file-A.rc:file-B.rc" hg log -r . --config ui.logtemplate="value-CLI\n"
-  value-A (known-bad-output !)
-  value-CLI (missing-correct-output !)
+  value-CLI