thodg/libgit2

diff --git a/src/checkout.c b/src/checkout.c
index a412c4c..bc976b8 100644
--- a/src/checkout.c
+++ b/src/checkout.c
@@ -336,22 +336,22 @@ static int checkout_action_wd_only(
 			error = git_iterator_advance(wditem, workdir);
 	} else {
 		/* untracked or ignored - can't know which until we advance through */
-		bool ignored, over = false;
-		bool removable = wd_item_is_removable(workdir, wd);
+		bool over = false, removable = wd_item_is_removable(workdir, wd);
+		git_iterator_status_t untracked_state;
 
 		/* copy the entry for issuing notification callback later */
 		git_index_entry saved_wd = *wd;
 		git_buf_sets(&data->tmp, wd->path);
 		saved_wd.path = data->tmp.ptr;
 
-		error = git_iterator_advance_over_and_check_ignored(
-			wditem, &ignored, workdir);
+		error = git_iterator_advance_over_with_status(
+			wditem, &untracked_state, workdir);
 		if (error == GIT_ITEROVER)
 			over = true;
 		else if (error < 0)
 			return error;
 
-		if (ignored) {
+		if (untracked_state == GIT_ITERATOR_STATUS_IGNORED) {
 			notify = GIT_CHECKOUT_NOTIFY_IGNORED;
 			remove = ((data->strategy & GIT_CHECKOUT_REMOVE_IGNORED) != 0);
 		} else {
diff --git a/src/diff.c b/src/diff.c
index f1c1b05..18cd52c 100644
--- a/src/diff.c
+++ b/src/diff.c
@@ -839,7 +839,7 @@ static int handle_unmatched_new_item(
 			DIFF_FLAG_ISNT_SET(diff, GIT_DIFF_ENABLE_FAST_UNTRACKED_DIRS))
 		{
 			git_diff_delta *last;
-			bool ignored;
+			git_iterator_status_t untracked_state;
 
 			/* attempt to insert record for this directory */
 			if ((error = diff_delta__from_one(diff, delta_type, nitem)) != 0)
@@ -851,13 +851,14 @@ static int handle_unmatched_new_item(
 				return git_iterator_advance(&info->nitem, info->new_iter);
 
 			/* iterate into dir looking for an actual untracked file */
-			if ((error = git_iterator_advance_over_and_check_ignored(
-					&info->nitem, &ignored, info->new_iter)) < 0 &&
+			if ((error = git_iterator_advance_over_with_status(
+					&info->nitem, &untracked_state, info->new_iter)) < 0 &&
 				error != GIT_ITEROVER)
 				return error;
 
-			/* it iteration only found ignored items, update the record */
-			if (ignored) {
+			/* if we found nothing or just ignored items, update the record */
+			if (untracked_state == GIT_ITERATOR_STATUS_IGNORED ||
+				untracked_state == GIT_ITERATOR_STATUS_EMPTY) {
 				last->status = GIT_DELTA_IGNORED;
 
 				/* remove the record if we don't want ignored records */
diff --git a/src/iterator.c b/src/iterator.c
index 1a24dad..dfa7997 100644
--- a/src/iterator.c
+++ b/src/iterator.c
@@ -1529,15 +1529,17 @@ int git_iterator_current_workdir_path(git_buf **path, git_iterator *iter)
 	return 0;
 }
 
-int git_iterator_advance_over_and_check_ignored(
-	const git_index_entry **entryptr, bool *ignored, git_iterator *iter)
+int git_iterator_advance_over_with_status(
+	const git_index_entry **entryptr,
+	git_iterator_status_t *status,
+	git_iterator *iter)
 {
 	int error = 0;
 	workdir_iterator *wi = (workdir_iterator *)iter;
 	char *base = NULL;
 	const git_index_entry *entry;
 
-	*ignored = false;
+	*status = GIT_ITERATOR_STATUS_NORMAL;
 
 	if (iter->type != GIT_ITERATOR_TYPE_WORKDIR)
 		return git_iterator_advance(entryptr, iter);
@@ -1548,11 +1550,12 @@ int git_iterator_advance_over_and_check_ignored(
 		if (git_ignore__lookup(
 				&wi->ignores, wi->fi.entry.path, &wi->is_ignored) < 0)
 			wi->is_ignored = true;
-		*ignored = wi->is_ignored;
+		if (wi->is_ignored)
+			*status = GIT_ITERATOR_STATUS_IGNORED;
 		return git_iterator_advance(entryptr, iter);
 	}
 
-	*ignored = true;
+	*status = GIT_ITERATOR_STATUS_EMPTY;
 
 	base = git__strdup(entry->path);
 	GITERR_CHECK_ALLOC(base);
@@ -1577,9 +1580,11 @@ int git_iterator_advance_over_and_check_ignored(
 
 		/* if we found a non-ignored item, treat parent as untracked */
 		if (!wi->is_ignored) {
-			*ignored = false;
+			*status = GIT_ITERATOR_STATUS_NORMAL;
 			break;
 		}
+		if (entry && !S_ISDIR(entry->mode))
+			*status = GIT_ITERATOR_STATUS_IGNORED;
 
 		if ((error = git_iterator_advance(&entry, iter)) < 0)
 			break;
diff --git a/src/iterator.h b/src/iterator.h
index dcedbd5..ba9c1e4 100644
--- a/src/iterator.h
+++ b/src/iterator.h
@@ -258,12 +258,23 @@ extern int git_iterator_current_workdir_path(
 /* Return index pointer if index iterator, else NULL */
 extern git_index *git_iterator_get_index(git_iterator *iter);
 
-/* Special type of advance that can be called when looking at a tree in
- * the working directory that leaves the iterator on the next item after
- * the tree, but also scans the tree contents looking for any items that
- * are not ignored.
+typedef enum {
+	GIT_ITERATOR_STATUS_NORMAL = 0,
+	GIT_ITERATOR_STATUS_IGNORED = 1,
+	GIT_ITERATOR_STATUS_EMPTY = 2
+} git_iterator_status_t;
+
+/* Advance over a directory and check if it contains no files or just
+ * ignored files.
+ *
+ * In a tree or the index, all directories will contain files, but in the
+ * working directory it is possible to have an empty directory tree or a
+ * tree that only contains ignored files.  Many Git operations treat these
+ * cases specially.  This advances over a directory (presumably an
+ * untracked directory) but checks during the scan if there are any files
+ * and any non-ignored files.
  */
-extern int git_iterator_advance_over_and_check_ignored(
-	const git_index_entry **entry, bool *ignored, git_iterator *iter);
+extern int git_iterator_advance_over_with_status(
+	const git_index_entry **entry, git_iterator_status_t *status, git_iterator *iter);
 
 #endif