Message Title

See it in 4.3.7 as well. I've done some extensive debugging on this so I'll share what I've found.

The start of the problem is in DefaultMergeEventListener.entityIsTransient(..) during the first copyValues(...) call. This first call will follow the path that calls TypeHelper.replace(...) where AbstractType.replace() is called which might call the Type's specific .replace().

AbstractType.java:replace()

public Object replace(
  Object original, 
  Object target, 
  SessionImplementor session, 
  Object owner, 
  Map copyCache, 
  ForeignKeyDirection foreignKeyDirection) 
  throws HibernateException {
  boolean include;
  if ( isAssociationType() ) { // <== Problem is here
    AssociationType atype = (AssociationType) this;
    include = atype.getForeignKeyDirection()==foreignKeyDirection;
  //include = (toParent == fromParent); // Derivation
  //include = false; // Derivation
  }
  else {
    include = ForeignKeyDirection.FOREIGN_KEY_FROM_PARENT==foreignKeyDirection;
  }
  // since include is false from above derivation, CollectionType.replace() is not called here and instead target is returned causing the empty Collection in the copy.
  return include ? replace(original, target, session, owner, copyCache) : target;
}

CollectionType.java

/**
 * Note: return true because this type is castable to <tt>AssociationType</tt>. Not because
 * all collections are associations.
 */
@Override
public boolean isAssociationType() {
  return true;
}

I believe this invites some semantic confusion. It may be necessary to change AbstractType to handle isCollectionType() separately than the isAssociationType() case.