I must say, that I know almost nothing about TFS. But have worked with its source control system. For now our team uses Mercurial as source control system, but our managers want the all-in-one system to manage the projects. They want to use Team Foundation Server, but for us distributed model of working with code is better then TFS's source control.
Can we use mercurial as source control system and not loose other TFS benefits for project's management (like bug tracker/ project server)?
You can absolutely use TFS without using the source control. I tend to agree with you, TFS's source control would be a huge step backwards if you're coming from Mercurial.
A couple things you'll be giving up.
On the other hand,
I might be missing something, but those are the items off the top of my head.
If they absolutely force you to check into TFS, there are a few people that use Hg "on top" of TFS here, and here