Revert "revert recent bug fix temporarily for release"

This reverts commit 16f1e24665.

Git/Config.hs

@@ -133,14 +133,28 @@ store' k v repo = repo
  - based on the core.bare and core.worktree settings.
  -}
 updateLocation :: Repo -> IO Repo
-updateLocation r@(Repo { location = LocalUnknown d })
-	| isBare r = ifM (doesDirectoryExist (fromRawFilePath dotgit))
-			( updateLocation' r $ Local dotgit Nothing
-			, updateLocation' r $ Local d Nothing
-			)
-	| otherwise = updateLocation' r $ Local dotgit (Just d)
+updateLocation r@(Repo { location = LocalUnknown d }) = case isBare r of
+	Just True -> ifM (doesDirectoryExist (fromRawFilePath dotgit))
+		( updateLocation' r $ Local dotgit Nothing
+		, updateLocation' r $ Local d Nothing
+		)
+	Just False -> mknonbare
+	{- core.bare not in config, probably because safe.directory
+	 - did not allow reading the config -}
+	Nothing -> ifM (Git.Construct.isBareRepo (fromRawFilePath d))
+		( mkbare
+		, mknonbare
+		)
   where
 	dotgit = d P.</> ".git"
+	-- git treats eg ~/foo as a bare git repository located in
+	-- ~/foo/.git if ~/foo/.git/config has core.bare=true
+	mkbare = ifM (doesDirectoryExist (fromRawFilePath dotgit))
+		( updateLocation' r $ Local dotgit Nothing
+		, updateLocation' r $ Local d Nothing
+		)
+	mknonbare = updateLocation' r $ Local dotgit (Just d)
+
 updateLocation r@(Repo { location = l@(Local {}) }) = updateLocation' r l
 updateLocation r = return r
 
@@ -212,8 +226,9 @@ boolConfig' :: Bool -> S.ByteString
 boolConfig' True = "true"
 boolConfig' False = "false"
 
-isBare :: Repo -> Bool
-isBare r = fromMaybe False $ isTrueFalse' =<< getMaybe coreBare r
+{- Note that repoIsLocalBare is often better to use than this. -}
+isBare :: Repo -> Maybe Bool
+isBare r = isTrueFalse' =<< getMaybe coreBare r
 
 coreBare :: ConfigKey
 coreBare = "core.bare"