diff --git a/dir.c b/dir.c
index 536416ff2df..6dd91be8185 100644
--- a/dir.c
+++ b/dir.c
@@ -771,7 +771,16 @@ static void invalidate_directory(struct untracked_cache *uc,
 				 struct untracked_cache_dir *dir)
 {
 	int i;
-	uc->dir_invalidated++;
+
+	/*
+	 * Invalidation increment here is just roughly correct. If
+	 * untracked_nr or any of dirs[].recurse is non-zero, we
+	 * should increment dir_invalidated too. But that's more
+	 * expensive to do.
+	 */
+	if (dir->valid)
+		uc->dir_invalidated++;
+
 	dir->valid = 0;
 	dir->untracked_nr = 0;
 	for (i = 0; i < dir->dirs_nr; i++)
@@ -1770,7 +1779,7 @@ static enum path_treatment treat_path(struct dir_struct *dir,
 	if (!de)
 		return treat_path_fast(dir, untracked, cdir, istate, path,
 				       baselen, pathspec);
-	if (is_dot_or_dotdot(de->d_name) || !strcmp(de->d_name, ".git"))
+	if (is_dot_or_dotdot(de->d_name) || !fspathcmp(de->d_name, ".git"))
 		return path_none;
 	strbuf_setlen(path, baselen);
 	strbuf_addstr(path, de->d_name);
@@ -1806,24 +1815,19 @@ static int valid_cached_dir(struct dir_struct *dir,
 	 */
 	refresh_fsmonitor(istate);
 	if (!(dir->untracked->use_fsmonitor && untracked->valid)) {
-		if (stat(path->len ? path->buf : ".", &st)) {
-			invalidate_directory(dir->untracked, untracked);
+		if (lstat(path->len ? path->buf : ".", &st)) {
 			memset(&untracked->stat_data, 0, sizeof(untracked->stat_data));
 			return 0;
 		}
 		if (!untracked->valid ||
 			match_stat_data_racy(istate, &untracked->stat_data, &st)) {
-			if (untracked->valid)
-				invalidate_directory(dir->untracked, untracked);
 			fill_stat_data(&untracked->stat_data, &st);
 			return 0;
 		}
 	}
 
-	if (untracked->check_only != !!check_only) {
-		invalidate_directory(dir->untracked, untracked);
+	if (untracked->check_only != !!check_only)
 		return 0;
-	}
 
 	/*
 	 * prep_exclude will be called eventually on this directory,
@@ -1850,13 +1854,20 @@ static int open_cached_dir(struct cached_dir *cdir,
 			   struct strbuf *path,
 			   int check_only)
 {
+	const char *c_path;
+
 	memset(cdir, 0, sizeof(*cdir));
 	cdir->untracked = untracked;
 	if (valid_cached_dir(dir, untracked, istate, path, check_only))
 		return 0;
-	cdir->fdir = opendir(path->len ? path->buf : ".");
-	if (dir->untracked)
+	c_path = path->len ? path->buf : ".";
+	cdir->fdir = opendir(c_path);
+	if (!cdir->fdir)
+		warning_errno(_("could not open directory '%s'"), c_path);
+	if (dir->untracked) {
+		invalidate_directory(dir->untracked, untracked);
 		dir->untracked->dir_opened++;
+	}
 	if (!cdir->fdir)
 		return -1;
 	return 0;
@@ -2966,10 +2977,12 @@ static int invalidate_one_component(struct untracked_cache *uc,
 }
 
 void untracked_cache_invalidate_path(struct index_state *istate,
-				     const char *path)
+				     const char *path, int safe_path)
 {
 	if (!istate->untracked || !istate->untracked->root)
 		return;
+	if (!safe_path && !verify_path(path))
+		return;
 	invalidate_one_component(istate->untracked, istate->untracked->root,
 				 path, strlen(path));
 }
@@ -2977,13 +2990,13 @@ void untracked_cache_invalidate_path(struct index_state *istate,
 void untracked_cache_remove_from_index(struct index_state *istate,
 				       const char *path)
 {
-	untracked_cache_invalidate_path(istate, path);
+	untracked_cache_invalidate_path(istate, path, 1);
 }
 
 void untracked_cache_add_to_index(struct index_state *istate,
 				  const char *path)
 {
-	untracked_cache_invalidate_path(istate, path);
+	untracked_cache_invalidate_path(istate, path, 1);
 }
 
 /* Update gitfile and core.worktree setting to connect work tree and git dir */
diff --git a/dir.h b/dir.h
index e7bb786a339..b0758b82a20 100644
--- a/dir.h
+++ b/dir.h
@@ -350,7 +350,7 @@ static inline int dir_path_match(const struct dir_entry *ent,
 int cmp_dir_entry(const void *p1, const void *p2);
 int check_dir_entry_contains(const struct dir_entry *out, const struct dir_entry *in);
 
-void untracked_cache_invalidate_path(struct index_state *, const char *);
+void untracked_cache_invalidate_path(struct index_state *, const char *, int safe_path);
 void untracked_cache_remove_from_index(struct index_state *, const char *);
 void untracked_cache_add_to_index(struct index_state *, const char *);
 
diff --git a/fsmonitor.c b/fsmonitor.c
index 0af7c4edba3..6d7bcd5d0ed 100644
--- a/fsmonitor.c
+++ b/fsmonitor.c
@@ -130,7 +130,7 @@ static void fsmonitor_refresh_callback(struct index_state *istate, const char *n
 	 * as it could be a new untracked file.
 	 */
 	trace_printf_key(&trace_fsmonitor, "fsmonitor_refresh_callback '%s'", name);
-	untracked_cache_invalidate_path(istate, name);
+	untracked_cache_invalidate_path(istate, name, 0);
 }
 
 void refresh_fsmonitor(struct index_state *istate)
diff --git a/fsmonitor.h b/fsmonitor.h
index cd3cc0ccf22..65f37436369 100644
--- a/fsmonitor.h
+++ b/fsmonitor.h
@@ -65,7 +65,7 @@ static inline void mark_fsmonitor_invalid(struct index_state *istate, struct cac
 {
 	if (core_fsmonitor) {
 		ce->ce_flags &= ~CE_FSMONITOR_VALID;
-		untracked_cache_invalidate_path(istate, ce->name);
+		untracked_cache_invalidate_path(istate, ce->name, 1);
 		trace_printf_key(&trace_fsmonitor, "mark_fsmonitor_invalid '%s'", ce->name);
 	}
 }
diff --git a/t/t7063-status-untracked-cache.sh b/t/t7063-status-untracked-cache.sh
index e5fb892f957..46b947824fd 100755
--- a/t/t7063-status-untracked-cache.sh
+++ b/t/t7063-status-untracked-cache.sh
@@ -22,6 +22,12 @@ avoid_racy() {
 	sleep 1
 }
 
+status_is_clean() {
+	>../status.expect &&
+	git status --porcelain >../status.actual &&
+	test_cmp ../status.expect ../status.actual
+}
+
 test_lazy_prereq UNTRACKED_CACHE '
 	{ git update-index --test-untracked-cache; ret=$?; } &&
 	test $ret -ne 1
@@ -683,4 +689,85 @@ test_expect_success 'untracked cache survives a commit' '
 	test_cmp ../before ../after
 '
 
+test_expect_success 'teardown worktree' '
+	cd ..
+'
+
+test_expect_success SYMLINKS 'setup worktree for symlink test' '
+	git init worktree-symlink &&
+	cd worktree-symlink &&
+	git config core.untrackedCache true &&
+	mkdir one two &&
+	touch one/file two/file &&
+	git add one/file two/file &&
+	git commit -m"first commit" &&
+	git rm -rf one &&
+	ln -s two one &&
+	git add one &&
+	git commit -m"second commit"
+'
+
+test_expect_success SYMLINKS '"status" after symlink replacement should be clean with UC=true' '
+	git checkout HEAD~ &&
+	status_is_clean &&
+	status_is_clean &&
+	git checkout master &&
+	avoid_racy &&
+	status_is_clean &&
+	status_is_clean
+'
+
+test_expect_success SYMLINKS '"status" after symlink replacement should be clean with UC=false' '
+	git config core.untrackedCache false &&
+	git checkout HEAD~ &&
+	status_is_clean &&
+	status_is_clean &&
+	git checkout master &&
+	avoid_racy &&
+	status_is_clean &&
+	status_is_clean
+'
+
+test_expect_success 'setup worktree for non-symlink test' '
+	git init worktree-non-symlink &&
+	cd worktree-non-symlink &&
+	git config core.untrackedCache true &&
+	mkdir one two &&
+	touch one/file two/file &&
+	git add one/file two/file &&
+	git commit -m"first commit" &&
+	git rm -rf one &&
+	cp two/file one &&
+	git add one &&
+	git commit -m"second commit"
+'
+
+test_expect_success '"status" after file replacement should be clean with UC=true' '
+	git checkout HEAD~ &&
+	status_is_clean &&
+	status_is_clean &&
+	git checkout master &&
+	avoid_racy &&
+	status_is_clean &&
+	test-dump-untracked-cache >../actual &&
+	grep -F "recurse valid" ../actual >../actual.grep &&
+	cat >../expect.grep <<EOF &&
+/ 0000000000000000000000000000000000000000 recurse valid
+/two/ 0000000000000000000000000000000000000000 recurse valid
+EOF
+	status_is_clean &&
+	test_cmp ../expect.grep ../actual.grep
+'
+
+test_expect_success '"status" after file replacement should be clean with UC=false' '
+	git config core.untrackedCache false &&
+	git checkout HEAD~ &&
+	status_is_clean &&
+	status_is_clean &&
+	git checkout master &&
+	avoid_racy &&
+	status_is_clean &&
+	status_is_clean
+'
+
 test_done
diff --git a/t/t7519-status-fsmonitor.sh b/t/t7519-status-fsmonitor.sh
index eb2d13bbcf8..756beb0d8eb 100755
--- a/t/t7519-status-fsmonitor.sh
+++ b/t/t7519-status-fsmonitor.sh
@@ -314,4 +314,43 @@ test_expect_success 'splitting the index results in the same state' '
 	test_cmp expect actual
 '
 
+test_expect_success UNTRACKED_CACHE 'ignore .git changes when invalidating UNTR' '
+	test_create_repo dot-git &&
+	(
+		cd dot-git &&
+		mkdir -p .git/hooks &&
+		: >tracked &&
+		: >modified &&
+		mkdir dir1 &&
+		: >dir1/tracked &&
+		: >dir1/modified &&
+		mkdir dir2 &&
+		: >dir2/tracked &&
+		: >dir2/modified &&
+		write_integration_script &&
+		git config core.fsmonitor .git/hooks/fsmonitor-test &&
+		git update-index --untracked-cache &&
+		git update-index --fsmonitor &&
+		GIT_TRACE_UNTRACKED_STATS="$TRASH_DIRECTORY/trace-before" \
+		git status &&
+		test-dump-untracked-cache >../before
+	) &&
+	cat >>dot-git/.git/hooks/fsmonitor-test <<-\EOF &&
+	printf ".git\0"
+	printf ".git/index\0"
+	printf "dir1/.git\0"
+	printf "dir1/.git/index\0"
+	EOF
+	(
+		cd dot-git &&
+		GIT_TRACE_UNTRACKED_STATS="$TRASH_DIRECTORY/trace-after" \
+		git status &&
+		test-dump-untracked-cache >../after
+	) &&
+	grep "directory invalidation" trace-before >>before &&
+	grep "directory invalidation" trace-after >>after &&
+	# UNTR extension unchanged, dir invalidation count unchanged
+	test_cmp before after
+'
+
 test_done
diff --git a/unpack-trees.c b/unpack-trees.c
index e6a15bbe44f..c9f6e314d5c 100644
--- a/unpack-trees.c
+++ b/unpack-trees.c
@@ -1528,7 +1528,7 @@ static void invalidate_ce_path(const struct cache_entry *ce,
 	if (!ce)
 		return;
 	cache_tree_invalidate_path(o->src_index, ce->name);
-	untracked_cache_invalidate_path(o->src_index, ce->name);
+	untracked_cache_invalidate_path(o->src_index, ce->name, 1);
 }
 
 /*