This restores a behavior that was accidentally lost during some
diff refactoring where an untracked directory that contains a .git
item should be treated as IGNORED, not as UNTRACKED.  The submodule
code already detects this, but the diff code was not handling the
scenario right.

This also updates a number of existing tests that were actually
exercising the behavior but did not have the right expectations in
place.  It actually makes the new
`test_diff_submodules__diff_ignore_options` test feel much better
because the "not-a-submodule" entries are now ignored instead of
showing up as untracked items.

Fixes #1697