Unfortunately I don't even have any hg repos I work with any more.  I use magit for almost everything these days.  So I guess from my perspective it doesn't matter any more.  

I tested `vc-root-diff` on Emacs 29.4 with the repo described below, and though it's slow the first time it seems to be much faster on subsequent calls, probably due to caching in Emacs.  I'd argue it's still unacceptably slow, because there can be an arbitrary number of ignored files.  The fundamental bug is assuming `hg status -A some_directory` is a fast operation, when it can easily take many seconds or even minutes because it's proportional to the number of files under some_directory.

mkdir /tmp/foo

hg init

echo -e "syntax: glob\n*" > .hgignore

for i in $(seq 1000) ; do mkdir $i ; (cd $i ; touch $(seq -s ' ' 1000)); done

$ time hg status -A ./ | wc
1000001 2000002 9786012

real 0m4.748s
user 0m3.703s
sys 0m1.063s

$ time hg status ./ | wc
      0       0       0

real 0m0.124s
user 0m0.101s
sys 0m0.024s

Here's some timing on one of my Yocto repos:

$ time hg status -A | wc
5074646 10180682 727258295

real 1m6.047s
user 0m23.774s
sys 0m26.154s

$ time hg status | wc
      0       0       0

real 0m0.204s
user 0m0.090s
sys 0m0.054s