Fix: Respect mssql_merge_exists flag and use merge as a strategy

sqlmesh/core/engine_adapter/base.py

@@ -551,11 +551,13 @@ def replace_query(
                     target_table,
                     source_queries,
                     target_columns_to_types,
+                    **kwargs,
                 )
         return self._insert_overwrite_by_condition(
             target_table,
             source_queries,
             target_columns_to_types,
+            **kwargs,
         )
 
     def create_index(
@@ -1614,7 +1616,7 @@ def _insert_overwrite_by_time_partition(
         **kwargs: t.Any,
     ) -> None:
         return self._insert_overwrite_by_condition(
-            table_name, source_queries, target_columns_to_types, where
+            table_name, source_queries, target_columns_to_types, where, **kwargs
         )
 
     def _values_to_sql(

sqlmesh/core/engine_adapter/mssql.py

@@ -423,7 +423,9 @@ def _insert_overwrite_by_condition(
         insert_overwrite_strategy_override: t.Optional[InsertOverwriteStrategy] = None,
         **kwargs: t.Any,
     ) -> None:
-        if not where or where == exp.true():
+        # note that this is passed as table_properties here rather than physical_properties
+        use_merge_strategy = kwargs.get("table_properties", {}).get("mssql_merge_exists")
+        if (not where or where == exp.true()) and not use_merge_strategy:
             # this is a full table replacement, call the base strategy to do DELETE+INSERT
             # which will result in TRUNCATE+INSERT due to how we have overridden self.delete_from()
             return EngineAdapter._insert_overwrite_by_condition(
@@ -436,7 +438,7 @@ def _insert_overwrite_by_condition(
                 **kwargs,
             )
 
-        # For actual conditional overwrites, use MERGE from InsertOverwriteWithMergeMixin
+        # For conditional overwrites or when mssql_merge_exists is set use MERGE
         return super()._insert_overwrite_by_condition(
             table_name=table_name,
             source_queries=source_queries,

tests/core/engine_adapter/test_mssql.py

@@ -9,14 +9,14 @@
 from sqlglot import expressions as exp
 from sqlglot import parse_one
 
+from pathlib import Path
+from sqlmesh import model
 from sqlmesh.core.engine_adapter.mssql import MSSQLEngineAdapter
-from sqlmesh.core.snapshot import SnapshotEvaluator, SnapshotChangeCategory
+from sqlmesh.core.snapshot import SnapshotEvaluator, SnapshotChangeCategory, Snapshot
 from sqlmesh.core.model import load_sql_based_model
+from sqlmesh.core.model.kind import SCDType2ByTimeKind
 from sqlmesh.core import dialect as d
-from sqlmesh.core.engine_adapter.shared import (
-    DataObject,
-    DataObjectType,
-)
+from sqlmesh.core.engine_adapter.shared import DataObject, DataObjectType, SourceQuery
 from sqlmesh.utils.date import to_ds
 from tests.core.engine_adapter import to_sql_calls
 
@@ -916,3 +916,89 @@ def test_replace_query_strategy(adapter: MSSQLEngineAdapter, mocker: MockerFixtu
         "TRUNCATE TABLE [test_table];",
         "INSERT INTO [test_table] ([a], [b]) SELECT [a] AS [a], [b] AS [b] FROM [db].[upstream_table] AS [upstream_table];",
     ]
+
+
+def test_mssql_merge_exists_switches_strategy_from_truncate_to_merge(
+    make_mocked_engine_adapter: t.Callable, mocker: MockerFixture
+):
+    adapter = make_mocked_engine_adapter(MSSQLEngineAdapter)
+
+    query = exp.select("*").from_("source")
+    source_queries = [SourceQuery(query_factory=lambda: query)]
+
+    # Test WITHOUT mssql_merge_exists, should use DELETE+INSERT strategy
+    base_insert_overwrite = mocker.patch(
+        "sqlmesh.core.engine_adapter.base.EngineAdapter._insert_overwrite_by_condition"
+    )
+
+    adapter._insert_overwrite_by_condition(
+        table_name="target",
+        source_queries=source_queries,
+        target_columns_to_types={
+            "id": exp.DataType.build("INT"),
+            "value": exp.DataType.build("VARCHAR"),
+        },
+        where=None,
+    )
+
+    # Should call base DELETE+INSERT strategy
+    assert base_insert_overwrite.called
+    base_insert_overwrite.reset_mock()
+
+    # Test WITH mssql_merge_exists uses MERGE strategy
+    super_insert_overwrite = mocker.patch(
+        "sqlmesh.core.engine_adapter.base.EngineAdapterWithIndexSupport._insert_overwrite_by_condition"
+    )
+
+    adapter._insert_overwrite_by_condition(
+        table_name="target",
+        source_queries=source_queries,
+        target_columns_to_types={
+            "id": exp.DataType.build("INT"),
+            "value": exp.DataType.build("VARCHAR"),
+        },
+        where=None,
+        table_properties={"mssql_merge_exists": True},
+    )
+
+    # Should call super's MERGE strategy, not base DELETE+INSERT
+    assert super_insert_overwrite.called
+    assert not base_insert_overwrite.called
+
+
+def test_python_scd2_model_preserves_physical_properties(make_snapshot):
+    @model(
+        "test_schema.python_scd2_with_mssql_merge",
+        kind=SCDType2ByTimeKind(
+            unique_key=["id"],
+            valid_from_name="valid_from",
+            valid_to_name="valid_to",
+            updated_at_name="updated_at",
+        ),
+        columns={
+            "id": "INT",
+            "value": "VARCHAR",
+            "updated_at": "TIMESTAMP",
+            "valid_from": "TIMESTAMP",
+            "valid_to": "TIMESTAMP",
+        },
+        physical_properties={"mssql_merge_exists": True},
+    )
+    def python_scd2_model(context, **kwargs):
+        import pandas as pd
+
+        return pd.DataFrame(
+            {"id": [1, 2], "value": ["a", "b"], "updated_at": ["2024-01-01", "2024-01-02"]}
+        )
+
+    m = model.get_registry()["test_schema.python_scd2_with_mssql_merge"].model(
+        module_path=Path("."),
+        path=Path("."),
+        dialect="tsql",
+    )
+
+    # verify model has physical_properties that trigger merge strategy
+    assert "mssql_merge_exists" in m.physical_properties
+    snapshot: Snapshot = make_snapshot(m)
+    assert snapshot.node.physical_properties == m.physical_properties
+    assert snapshot.node.physical_properties.get("mssql_merge_exists")