Trying to retain the intermediate .md files when rendering a .pdf document gives the following error message:

Error in (function (toc = FALSE, toc_depth = 2, number_sections = FALSE,  : 
  unused argument (keep_md = TRUE)
Calls: <Anonymous> -> create_output_format -> do.call -> <Anonymous>
Execution halted

Below is a minimal example that was able to reproduce the issue

---
output:
    pdf_document:
        keep_md: true
---

Document text

```{r}
print("execute some R code")
```

Either removing keep_md: true or changing the output to html_document will fix the problem.

I tested this on macOS 10.12.3 and CentOS release 6.8, both R version 3.3.2 and rmarkdown version 1.3