fixes #53520

extensions/git/src/repository.ts

@@ -537,9 +537,20 @@ export class Repository implements Disposable {
 		const fsWatcher = workspace.createFileSystemWatcher('**');
 		this.disposables.push(fsWatcher);
 
-		const onWorkspaceChange = anyEvent(fsWatcher.onDidChange, fsWatcher.onDidCreate, fsWatcher.onDidDelete);
-		const onRepositoryChange = filterEvent(onWorkspaceChange, uri => isDescendant(repository.root, uri.fsPath));
-		const onRelevantRepositoryChange = filterEvent(onRepositoryChange, uri => !/\/\.git(\/index\.lock)?$/.test(uri.path));
+		const workspaceFilter = (uri: Uri) => isDescendant(repository.root, uri.fsPath);
+		const onWorkspaceDelete = filterEvent(fsWatcher.onDidDelete, workspaceFilter);
+		const onWorkspaceChange = filterEvent(anyEvent(fsWatcher.onDidChange, fsWatcher.onDidCreate), workspaceFilter);
+		const onRepositoryDotGitDelete = filterEvent(onWorkspaceDelete, uri => /\/\.git$/.test(uri.path));
+		const onRepositoryChange = anyEvent(onWorkspaceDelete, onWorkspaceChange);
+
+		// relevant repository changes are:
+		//  - DELETE .git folder
+		//  - ANY CHANGE within .git folder except .git itself and .git/index.lock
+		const onRelevantRepositoryChange = anyEvent(
+			onRepositoryDotGitDelete,
+			filterEvent(onRepositoryChange, uri => !/\/\.git(\/index\.lock)?$/.test(uri.path))
+		);
+
 		onRelevantRepositoryChange(this.onFSChange, this, this.disposables);
 
 		const onRelevantGitChange = filterEvent(onRelevantRepositoryChange, uri => /\/\.git\//.test(uri.path));