Right now when I run arc diff command on an SVN working copy, that makes use of "svn:externals" property and has one of files/folders in these externals modified I get this warning (both "tools" and "core" folders come from externals):

The working copy includes changes to 'svn:externals' paths. These changes will not be included in the diff because SVN can not commit 'svn:externals' changes alongside normal changes.

Modified 'svn:externals' files:

        core/kernel/tests
        tools/build
        tools/build/inc
        tools/build/targets

    Generate a diff (with just local changes) anyway? [y/N]

That's ok, but if I select "N" (that to me means to generate diff that includes changes in externals as well) I've got this:

Usage Exception: User aborted the workflow.

I think it's wrong to consider patch build of local + external changes as an error. For example user who will run arc patch will have same externals checked out and that patch will be applied without any issues.