Comment by wasimlorgat

It does an ordinary three-way git merge (treating notebooks as plaintext) then a two-way merge on conflicted bits. We opted for that approach because its incredibly simple and has worked perfectly for us (I think since we tend to work with small code cells). I think nbdime has a full-on three-way notebook merge if that's what you need, which can be used together with nbdev's Jupyter save hook to clan up unneeded metadata.