Researching distributed source control management (specifically mercurial). My question is more or less what is the best practice for rejecting entire sets of code that fail testing?

Example:

A team is working on a hello world program. They have testers and a scheduled release coming up with specific features planned.

Upcoming Release:
   Add feature A
   Add feature B
   Add feature C

So, the developers make their clones for their features, do the work and merge them into a QA repo for the testers to scrutinize.

Let's say the testers report back that "Feature B is incomplete and in fact dangerous", and they would like to retest A and C.

End example.

What's the best way to do all this so that feature B can easily be removed and you end up with a new repo that contains only feature A and C merged together?

Recreate the test repo? Back out B? Other magic?