This is a companion of #935, porting the changes from vfs-2.54.0 to vfs-2.55.0.

Problem

In virtual filesystem (VFS/GVFS) mode, reset --mixed fails to report hydrated files as modified.

A hydrated file is one that has been read (e.g., via blame or cat-file) and materialized on disk by ProjFS, but not modified — so it is not in GVFS's ModifiedPaths database and retains the skip-worktree bit in the index.

Reproduction

1. gvfs clone a repo
2. git blame Readme.md — hydrates the file (ProjFS materializes content on disk)
3. git reset --mixed HEAD~1 (where Readme.md differs between HEAD and HEAD~1)
4. Expected: Readme.md appears in reset output and git status shows it as modified
5. Actual: Readme.md is missing from output; git status reports clean

Root cause

The VFS-specific code in update_index_from_diff() uses file_exists() to decide whether to clear skip-worktree:

• Files NOT on disk (virtual/placeholder): file_exists() returns false → skip-worktree cleared, pre-reset content written to disk via checkout_entry() → correctly reported as modified ✓
• Files on disk (hydrated): file_exists() returns true → skip-worktree left set → refresh_index() skips the entry → invisible to status ✗

The original code assumed that if a file exists on disk, it must already be tracked properly. But hydrated-but-not-modified files exist on disk with stale content and are NOT in ModifiedPaths.

Fix

Always clear skip-worktree (respect_skip_worktree = 0) for all entries processed by update_index_from_diff() when VFS mode is active. The file_exists() check now only controls whether pre-reset content needs to be written to disk — it no longer gates the skip-worktree decision.

After the reset, GVFS's GitIndexParser detects the cleared skip-worktree bits via the post-index-change hook and adds affected paths to ModifiedPaths, so subsequent git commands also see them correctly.

Before (buggy)

if (core_virtualfilesystem && !file_exists(two->path))
{
    respect_skip_worktree = 0;      // only for missing files
    // ... write content to disk ...
}

After (fixed)

if (core_virtualfilesystem)
{
    respect_skip_worktree = 0;      // for ALL changed entries

    if (!file_exists(two->path))    // only write content for missing files
    {
        // ... write content to disk ...
    }
}

Testing

• 3 new tests in t1093-virtualfilesystem.sh:
  • Hydrated file: file exists on disk, should appear in reset output
  • Non-hydrated file: file missing from disk, should be written and appear in output
  • Partial reset: unchanged files retain skip-worktree
• Verified manually against a real GVFS enlistment: GVFS and control repo now produce identical output (224 modified files including Readme.md)
• All 25 existing t1093 tests pass