I am working with a Subversion server that was recently upgraded to version 1.7. I am using the command-line Linux client 1.7.10.
I created a branch like this:
If you are on IntelliJ 13.1 (Build #IU-135.475) and having this problem and your server is not 1.7x yet simply go to your Subversion preferences, presentation tab, un-tick 'Show merge source in history and annotations'.