I just found a very ugly problem that appears in Subversion when ErrorDocument 404 handler is enabled in Apache like this:
ErrorDocument 404 http://www.blah.com
Basically what it adds up to is that Subversion refuses to add any new files to a repository and shows propfind 302 found error if
ErrorDocument 404 handler is enabled.
The solution is to disable special 404 error handling for Subversion directories with
ErrorDocument 404 default: