I have no time to dig this down, but I just noticed this by accident:
$ make
$ cd t
$ sh ./t7011-skip-worktree-reading.sh -d
$ cd trash*.t7011*
$ git reset --hard HEAD
error: Entry '1' not uptodate. Cannot merge.
fatal: Could not reset index file to revision 'HEAD'.
which looks quite bogus. "reset --hard" is meant to be the last
resort "no matter what, please match the working tree to the commit"
and should not ever error out with "not uptodate Cannot merge"
message.
Interestingly, you can do this to work it around, though:
$ cd t
$ sh ./t7011-skip-worktree-reading.sh -d
$ cd trash*.t7011*
$ git reset
$ git reset --hard HEAD
HEAD is now at .... init
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