unpack-trees: do not fail reset because of unmerged skipped entry

After modify/delete merge conflict happens in a file skipped by sparse
checkout, "git reset --merge", which implements the "--abort" actions,
and "git reset --hard" fail with message "Entry * not uptodate. Cannot
update sparse checkout."

As explained in [1], the up-to-date checker mistakenly treats conflicted
entry which does not exist in HEAD as still skipped by sparse checkout.

Use the fix suggested in [1]. Also, add test case which verifies the
issue is fixed.

[1] https://public-inbox.org/git/20180616051444.GA29754@duynguyen.home/

Signed-off-by: Duy Nguyen <pclouds@gmail.com>
Signed-off-by: Max Kirillov <max@max630.net>
Signed-off-by: Junio C Hamano <gitster@pobox.com>

t/t3035-merge-sparse.sh

@@ -0,0 +1,59 @@
+#!/bin/sh
+
+test_description='merge with sparse files'
+
+. ./test-lib.sh
+
+# test_file $filename $content
+test_file () {
+	echo "$2" > "$1" &&
+	git add "$1"
+}
+
+# test_commit_this $message_and_tag
+test_commit_this () {
+	git commit -m "$1" &&
+	git tag "$1"
+}
+
+test_expect_success 'setup' '
+	: >empty &&
+	test_file checked-out init &&
+	test_file modify_delete modify_delete_init &&
+	test_commit_this init &&
+	test_file modify_delete modify_delete_theirs &&
+	test_commit_this theirs &&
+	git reset --hard init &&
+	git rm modify_delete &&
+	test_commit_this ours &&
+	git config core.sparseCheckout true &&
+	echo "/checked-out" >.git/info/sparse-checkout &&
+	git reset --hard &&
+	! git merge theirs
+'
+
+test_expect_success 'reset --hard works after the conflict' '
+	git reset --hard
+'
+
+test_expect_success 'is reset properly' '
+	git status --porcelain -- modify_delete >out &&
+	test_cmp empty out &&
+	test_path_is_missing modify_delete
+'
+
+test_expect_success 'setup: conflict back' '
+	! git merge theirs
+'
+
+test_expect_success 'Merge abort works after the conflict' '
+	git merge --abort
+'
+
+test_expect_success 'is aborted properly' '
+	git status --porcelain -- modify_delete >out &&
+	test_cmp empty out &&
+	test_path_is_missing modify_delete
+'
+
+test_done

unpack-trees.c

@@ -1246,7 +1246,7 @@ static void mark_new_skip_worktree(struct exclude_list *el,
 		if (select_flag && !(ce->ce_flags & select_flag))
 			continue;
 
-		if (!ce_stage(ce))
+		if (!ce_stage(ce) && !(ce->ce_flags & CE_CONFLICTED))
 			ce->ce_flags |= skip_wt_flag;
 		else
 			ce->ce_flags &= ~skip_wt_flag;