To check we follow mercurial's approach to ignore any nested repository, regardless of subrepo use and location under ignored folder.
See Issue 33 for details.

Neither of repository s1 or s2 (in the root and under ignored folder skip/) is reported, files under skip/s2 are not amoung ignored 

$hg status -A
A .hgignore
A readme
I skip/a

$hg status -i
I skip/a
