GIT cloning(or pull/push) doesn't work properly if you have a sub-folder as its own GIT repo

I don't want to categorize this as bug until I hear expert panel's opinion. Spare me if its a known issue or if I am doing something silly :) I did enough research online and couldn't find a good answer.

Here it goes..

Let's say if I have a folder called "ParentGITRepo" which is a local GIT repo. I have sub folders called "Child1Repo" and "Child2" with some files on it. For some reason, whether accidentally or deliberately, I make "Child1Repo" a GIT repo on its own. GIT recognizes ParentGITRepo & Child1Repo as separate GIT repositories. But, if I clone "ParentGITRepo" into somewhere else, I am missing everything from Child1Repo. The worse thing is, even if I cleanup "Child1Repo" by removing it's .git folder, the parent GIT repo is ignoring any activity I do in that folder.

I think, the right way to do this setup is probably using git sub modules or something. But given this scenario, what is the expected behaviour? Am i missing? It would really make more sense if you can go thro the following steps (test cases) outlined below.

# Setting up ParentGITRepo & Child1Repo and Child2
$ cd ~
$ mkdir ParentGITRepo
$ cd ParentGITRepo/
$ git init .
$ mkdir Child1Repo
$ mkdir Child2
$ cd Child1Repo/
$ git init .
$ echo "Child1RepoFile" > Child1RepoFile.txt
$ git add .
$ git commit -a -m "Adding Child1Repo content"
[master (root-commit) 01ccc52] Adding Child1Repo content
 1 files changed, 1 insertions(+), 0 deletions(-)
 create mode 100644 Child1RepoFile.txt

$ cd ../Child2/
$ echo "Child2 file content" > Child2File.txt
$ cd ..
$ echo "Parentfile" > ParentFile.txt
$ git add .
$ git commit -a -m "Adding Parent content"
[master (root-commit) b31d0a5] Adding Parent content
 3 files changed, 3 insertions(+), 0 deletions(-)
 create mode 160000 Child1Repo
 create mode 100644 Child2/Child2File.txt
 create mode 100644 ParentFile.txt

---------------------------------------
 # Now verify ParentGITRepo & Child1Repo working independently
$ cd ~/ParentGITRepo/
$ git log
commit b31d0a5aef19c6b119d89718f560905ad0f34aa7
Author: Siddique Hameed <siddii+git@gmail.com>
Date:   Fri Apr 22 11:25:15 2011 -0500

   Adding Parent content

$ cd ~/ParentGITRepo/Child1Repo/
$ git log
commit 01ccc52931f8b40f6d92b29769300a254d8dd411
Author: Siddique Hameed <siddii+git@gmail.com>
Date:   Fri Apr 22 11:22:00 2011 -0500

   Adding Child1Repo content

--------------------------------------------

# Now try cloning ParentGITRepo & verify the contents inside it $ cd ~ $ git clone ParentGITRepo/ ParentGITRepoClone/ Cloning into ParentGITRepoClone... done. $ cd ParentGITRepoClone/ $ ls -a ./ ../ .git/ Child1Repo/ Child2/ ParentFile.txt

$ cd Child1Repo/ $ ls -a ./ ../

$ git log
commit b31d0a5aef19c6b119d89718f560905ad0f34aa7
Author: Siddique Hameed <siddii+git@gmail.com>
Date:   Fri Apr 22 11:25:15 2011 -0500

   Adding Parent content

--------------------------------------------

As you can see there is nothing in Child1Repo after its was cloned. I also tried the reverse of this. Like, having a child folder as GIT repo and make a ParentFolder a repo on its own & clone the parent folder and the cloned folder doesnt contain anything from child repo.

Let me know if you have more questions.

Thanks,

Siddique