/bin/sh compatibility issue

[Johannes Hofmann]

The following shell script outputs "false1" with all shells I tried
but with /bin/sh on DragonFly. Is this a known incompatibility?

#!/bin/sh
set -e
if true; then
      false && echo "huh?"
fi
echo "false1"
false
echo "false2"


 Johannes

PS: This issue has shown up with the hgmerge script from mercurial.