emerge-execute-line-deletions is a variable defined in `emerge.el'.
Its value is

If non-nil: `emerge-execute-line' makes no output if an input was deleted.
It concludes that an input version has been deleted when an ancestor entry
is present, only one A or B entry is present, and an output entry is present.
If nil: In such circumstances, the A or B file that is present will be
copied to the designated output file.

You can customize this variable.