The current impl in MercurialSCM just does

for( FilePath child : workspace.list((FileFilter)null) )

{ if(child.getName().equals(".hg")) continue; child.deleteRecursive(); }

which deletes version-controlled files along with everything else, forcing a
clean checkout the next time (much slower than a pull for a big repository), and
fragmenting the disk.

Better would be to run

hg up -C .
hg --config extensions.purge= clean --all

which (1) reverts any accidental modifications made to source files by the
previous build, (2) deletes all and only those files which are not listed in the
Hg manifest for the current revision.

I could implement the change if you agree.