I find the following sentence from the rsync 3.0.7 manual page
discussion of --hard-links to be unclear:

     [incremental recursion] does not affect the accuracy of the
     transfer, just its efficiency.

Does that mean ...

1) The transfer will be less efficient because rsync will transfer the
contents of the file, only to discover later that the transfer was
unnecessary, at which point it will toss the transferred data and
hard-link the file, leaving the file system an accurate duplicate of
the source, or ...

2) The file contents will be accurately copied into a new file, and
you will lose the space efficiency of having the hard link.

I read this as (1) and was happy, but the behavior seems to be (2).
Whichever the implementation does, please clarify the documentation.