"Kevin Willford via GitGitGadget" [off-list ref] writes:
quoted hunk ↗ jump to hunk
@@ -141,6 +143,18 @@ static void update_index_from_diff(struct diff_queue_struct *q,
ce = make_cache_entry(&the_index, one->mode, &one->oid, one->path,
0, 0);
+
+ /*
+ * If the file 1) corresponds to an existing index entry with
+ * skip-worktree set, or 2) does not exist in the index but is
+ * outside the sparse checkout definition, add a skip-worktree bit
+ * to the new index entry.
+ */
+ pos = cache_name_pos(one->path, strlen(one->path));
+ if ((pos >= 0 && ce_skip_worktree(active_cache[pos])) ||
+ (pos < 0 && !path_in_sparse_checkout(one->path, &the_index)))
+ ce->ce_flags |= CE_SKIP_WORKTREE;
OK. Nicely explained.