Watch out for old Subversion clients
I had an old SVN command line client, but was not using it directly.
New (1.6.3) clients should not be mixed with older clients, because the way they handle the merge-info property.
All my other clients (Visual Studio, IntelliJ, Tortoise) were up to date, but it appears that TeamCity’s remote run used the old command-line client.
Resolution: Install newest version of SlikSVN, make sure it’s in the path.