Unable to do checkout from teamcity if branch is provided via parameter

Teamcity is failing to checkout with below error if branch is provided via Environment variable parameter. 

Failed to collect changes, error: Error collecting changes for VCS repository '"NextGenFeatureBranch" {instance id=1275, parent internal id=144, parent id=NextGenFeatureBranch, description: "mercurial: http://local:8000/hg"}' '"c:\program files\mercurial\hg.exe" --encoding UTF-8 log -v --style=C:\TeamCity\temp\teamcity60478583374916hg.log.template -r "ancestors(b16e9d5d7a63) - ancestors(973fb571738b)"' command failed. stderr: abort: revlog decompress error: Error -3 while decompressing data: invalid distance too far back!

Changing the parameter to run via feature branch by passing parameter on run time from Run Custom Build screen:-

Following are my VCS settings:-

Teamcity checkout fine if I set the value of branch as default in Environment Variable parameter.