patch, 16 partsfix config-reading in non-repos

diff --git a/t/t1007-hash-object.sh b/t/t1007-hash-object.sh
index 7d2baa1..c89faa6 100755
--- a/t/t1007-hash-object.sh
+++ b/t/t1007-hash-object.sh
@@ -101,7 +101,7 @@ test_expect_success 'git hash-object --stdin file1 <file0 first operates on file
 	test "$obname1" = "$obname1new"
 '
 
-test_expect_success 'check that appropriate filter is invoke when --path is used' '
+test_expect_success 'set up crlf tests' '
 	echo fooQ | tr Q "\\015" >file0 &&
 	cp file0 file1 &&
 	echo "file0 -crlf" >.gitattributes &&
@@ -109,7 +109,10 @@ test_expect_success 'check that appropriate filter is invoke when --path is used
 	git config core.autocrlf true &&
 	file0_sha=$(git hash-object file0) &&
 	file1_sha=$(git hash-object file1) &&
-	test "$file0_sha" != "$file1_sha" &&
+	test "$file0_sha" != "$file1_sha"
+'
+
+test_expect_success 'check that appropriate filter is invoke when --path is used' '
 	path1_sha=$(git hash-object --path=file1 file0) &&
 	path0_sha=$(git hash-object --path=file0 file1) &&
 	test "$file0_sha" = "$path0_sha" &&
@@ -117,38 +120,19 @@ test_expect_success 'check that appropriate filter is invoke when --path is used
 	path1_sha=$(cat file0 | git hash-object --path=file1 --stdin) &&
 	path0_sha=$(cat file1 | git hash-object --path=file0 --stdin) &&
 	test "$file0_sha" = "$path0_sha" &&
-	test "$file1_sha" = "$path1_sha" &&
-	git config --unset core.autocrlf
+	test "$file1_sha" = "$path1_sha"
 '
 
 test_expect_success 'check that --no-filters option works' '
-	echo fooQ | tr Q "\\015" >file0 &&
-	cp file0 file1 &&
-	echo "file0 -crlf" >.gitattributes &&
-	echo "file1 crlf" >>.gitattributes &&
-	git config core.autocrlf true &&
-	file0_sha=$(git hash-object file0) &&
-	file1_sha=$(git hash-object file1) &&
-	test "$file0_sha" != "$file1_sha" &&
 	nofilters_file1=$(git hash-object --no-filters file1) &&
 	test "$file0_sha" = "$nofilters_file1" &&
 	nofilters_file1=$(cat file1 | git hash-object --stdin) &&
-	test "$file0_sha" = "$nofilters_file1" &&
-	git config --unset core.autocrlf
+	test "$file0_sha" = "$nofilters_file1"
 '
 
 test_expect_success 'check that --no-filters option works with --stdin-paths' '
-	echo fooQ | tr Q "\\015" >file0 &&
-	cp file0 file1 &&
-	echo "file0 -crlf" >.gitattributes &&
-	echo "file1 crlf" >>.gitattributes &&
-	git config core.autocrlf true &&
-	file0_sha=$(git hash-object file0) &&
-	file1_sha=$(git hash-object file1) &&
-	test "$file0_sha" != "$file1_sha" &&
 	nofilters_file1=$(echo "file1" | git hash-object --stdin-paths --no-filters) &&
-	test "$file0_sha" = "$nofilters_file1" &&
-	git config --unset core.autocrlf
+	test "$file0_sha" = "$nofilters_file1"
 '
 
 pop_repo

builtin/hash-object.c, t/t1007-hash-object.sh

diff --git a/builtin/hash-object.c b/builtin/hash-object.c
index f7d3567..9028e1f 100644
--- a/builtin/hash-object.c
+++ b/builtin/hash-object.c
@@ -87,6 +87,7 @@ int cmd_hash_object(int argc, const char **argv, const char *prefix)
 	int stdin_paths = 0;
 	int no_filters = 0;
 	int literally = 0;
+	int nongit = 0;
 	unsigned flags = HASH_FORMAT_CHECK;
 	const char *vpath = NULL;
 	const struct option hash_object_options[] = {
@@ -107,12 +108,14 @@ int cmd_hash_object(int argc, const char **argv, const char *prefix)
 	argc = parse_options(argc, argv, NULL, hash_object_options,
 			     hash_object_usage, 0);
 
-	if (flags & HASH_WRITE_OBJECT) {
+	if (flags & HASH_WRITE_OBJECT)
 		prefix = setup_git_directory();
-		prefix_length = prefix ? strlen(prefix) : 0;
-		if (vpath && prefix)
-			vpath = prefix_filename(prefix, prefix_length, vpath);
-	}
+	else
+		prefix = setup_git_directory_gently(&nongit);
+
+	prefix_length = prefix ? strlen(prefix) : 0;
+	if (vpath && prefix)
+		vpath = prefix_filename(prefix, prefix_length, vpath);
 
 	git_config(git_default_config, NULL);
 
diff --git a/t/t1007-hash-object.sh b/t/t1007-hash-object.sh
index c89faa6..acca9ac 100755
--- a/t/t1007-hash-object.sh
+++ b/t/t1007-hash-object.sh
@@ -123,6 +123,17 @@ test_expect_success 'check that appropriate filter is invoke when --path is used
 	test "$file1_sha" = "$path1_sha"
 '
 
+test_expect_success 'gitattributes also work in a subdirectory' '
+	mkdir subdir &&
+	(
+		cd subdir &&
+		subdir_sha0=$(git hash-object ../file0) &&
+		subdir_sha1=$(git hash-object ../file1) &&
+		test "$file0_sha" = "$subdir_sha0" &&
+		test "$file1_sha" = "$subdir_sha1"
+	)
+'
+
 test_expect_success 'check that --no-filters option works' '
 	nofilters_file1=$(git hash-object --no-filters file1) &&
 	test "$file0_sha" = "$nofilters_file1" &&

builtin/diff.c, t/t4053-diff-no-index.sh

diff --git a/builtin/diff.c b/builtin/diff.c
index a31643c..7f91f6d 100644
--- a/builtin/diff.c
+++ b/builtin/diff.c
@@ -301,9 +301,9 @@ int cmd_diff(int argc, const char **argv, const char *prefix)
 			break;
 	}
 
-	if (!no_index) {
-		prefix = setup_git_directory_gently(&nongit);
+	prefix = setup_git_directory_gently(&nongit);
 
+	if (!no_index) {
 		/*
 		 * Treat git diff with at least one path outside of the
 		 * repo the same as if the command would have been executed
diff --git a/t/t4053-diff-no-index.sh b/t/t4053-diff-no-index.sh
index e60c951..453e6c3 100755
--- a/t/t4053-diff-no-index.sh
+++ b/t/t4053-diff-no-index.sh
@@ -107,4 +107,24 @@ test_expect_success 'diff from repo subdir shows real paths (implicit)' '
 	test_cmp expect actual.head
 '
 
+test_expect_success 'diff --no-index from repo subdir respects config (explicit)' '
+	echo "diff --git ../../non/git/a ../../non/git/b" >expect &&
+	test_config -C repo diff.noprefix true &&
+	test_expect_code 1 \
+		git -C repo/sub \
+		diff --no-index ../../non/git/a ../../non/git/b >actual &&
+	head -n 1 <actual >actual.head &&
+	test_cmp expect actual.head
+'
+
+test_expect_success 'diff --no-index from repo subdir respects config (implicit)' '
+	echo "diff --git ../../non/git/a ../../non/git/b" >expect &&
+	test_config -C repo diff.noprefix true &&
+	test_expect_code 1 \
+		git -C repo/sub \
+		diff ../../non/git/a ../../non/git/b >actual &&
+	head -n 1 <actual >actual.head &&
+	test_cmp expect actual.head
+'
+
 test_done

diff --git a/builtin/diff.c b/builtin/diff.c
index b7a9405..a31643c 100644
--- a/builtin/diff.c
+++ b/builtin/diff.c
@@ -301,20 +301,21 @@ int cmd_diff(int argc, const char **argv, const char *prefix)
 			break;
 	}
 
-	if (!no_index)
+	if (!no_index) {
 		prefix = setup_git_directory_gently(&nongit);
 
-	/*
-	 * Treat git diff with at least one path outside of the
-	 * repo the same as if the command would have been executed
-	 * outside of a git repository.  In this case it behaves
-	 * the same way as "git diff --no-index <a> <b>", which acts
-	 * as a colourful "diff" replacement.
-	 */
-	if (nongit || ((argc == i + 2) &&
-		       (!path_inside_repo(prefix, argv[i]) ||
-			!path_inside_repo(prefix, argv[i + 1]))))
-		no_index = DIFF_NO_INDEX_IMPLICIT;
+		/*
+		 * Treat git diff with at least one path outside of the
+		 * repo the same as if the command would have been executed
+		 * outside of a git repository.  In this case it behaves
+		 * the same way as "git diff --no-index <a> <b>", which acts
+		 * as a colourful "diff" replacement.
+		 */
+		if (nongit || ((argc == i + 2) &&
+			       (!path_inside_repo(prefix, argv[i]) ||
+				!path_inside_repo(prefix, argv[i + 1]))))
+			no_index = DIFF_NO_INDEX_IMPLICIT;
+	}
 
 	if (!no_index)
 		gitmodules_config();

diff --git a/pager.c b/pager.c
index 6470b81..ae46da9 100644
--- a/pager.c
+++ b/pager.c
@@ -6,11 +6,6 @@
 #define DEFAULT_PAGER "less"
 #endif
 
-/*
- * This is split up from the rest of git so that we can do
- * something different on Windows.
- */
-
 static struct child_process pager_process = CHILD_PROCESS_INIT;
 
 static void wait_for_pager(int in_signal)

git.c, t/t4204-patch-id.sh

diff --git a/git.c b/git.c
index 1c61151..ab5c99c 100644
--- a/git.c
+++ b/git.c
@@ -444,7 +444,7 @@ static struct cmd_struct commands[] = {
 	{ "pack-objects", cmd_pack_objects, RUN_SETUP },
 	{ "pack-redundant", cmd_pack_redundant, RUN_SETUP },
 	{ "pack-refs", cmd_pack_refs, RUN_SETUP },
-	{ "patch-id", cmd_patch_id },
+	{ "patch-id", cmd_patch_id, RUN_SETUP_GENTLY },
 	{ "pickaxe", cmd_blame, RUN_SETUP },
 	{ "prune", cmd_prune, RUN_SETUP },
 	{ "prune-packed", cmd_prune_packed, RUN_SETUP },
diff --git a/t/t4204-patch-id.sh b/t/t4204-patch-id.sh
index 84a8096..0288c17 100755
--- a/t/t4204-patch-id.sh
+++ b/t/t4204-patch-id.sh
@@ -143,6 +143,20 @@ test_expect_success 'patch-id supports git-format-patch MIME output' '
 	test_cmp patch-id_master patch-id_same
 '
 
+test_expect_success 'patch-id respects config from subdir' '
+	test_config patchid.stable true &&
+	mkdir subdir &&
+
+	# copy these because test_patch_id() looks for them in
+	# the current directory
+	cp bar-then-foo foo-then-bar subdir &&
+
+	(
+		cd subdir &&
+		test_patch_id irrelevant patchid.stable=true
+	)
+'
+
 cat >nonl <<\EOF
 diff --git i/a w/a
 index e69de29..2e65efe 100644

diff-no-index.c, t/t4053-diff-no-index.sh

diff --git a/diff-no-index.c b/diff-no-index.c
index 1f8999b..f420786 100644
--- a/diff-no-index.c
+++ b/diff-no-index.c
@@ -281,6 +281,9 @@ void diff_no_index(struct rev_info *revs,
 
 	DIFF_OPT_SET(&revs->diffopt, NO_INDEX);
 
+	DIFF_OPT_SET(&revs->diffopt, RELATIVE_NAME);
+	revs->diffopt.prefix = prefix;
+
 	revs->max_count = -2;
 	diff_setup_done(&revs->diffopt);
 
diff --git a/t/t4053-diff-no-index.sh b/t/t4053-diff-no-index.sh
index 6eb8321..e60c951 100755
--- a/t/t4053-diff-no-index.sh
+++ b/t/t4053-diff-no-index.sh
@@ -89,4 +89,22 @@ test_expect_success 'turning a file into a directory' '
 	)
 '
 
+test_expect_success 'diff from repo subdir shows real paths (explicit)' '
+	echo "diff --git a/../../non/git/a b/../../non/git/b" >expect &&
+	test_expect_code 1 \
+		git -C repo/sub \
+		diff --no-index ../../non/git/a ../../non/git/b >actual &&
+	head -n 1 <actual >actual.head &&
+	test_cmp expect actual.head
+'
+
+test_expect_success 'diff from repo subdir shows real paths (implicit)' '
+	echo "diff --git a/../../non/git/a b/../../non/git/b" >expect &&
+	test_expect_code 1 \
+		git -C repo/sub \
+		diff ../../non/git/a ../../non/git/b >actual &&
+	head -n 1 <actual >actual.head &&
+	test_cmp expect actual.head
+'
+
 test_done

config.c, pager.c

diff --git a/config.c b/config.c
index 0dfed68..8b28447 100644
--- a/config.c
+++ b/config.c
@@ -927,9 +927,6 @@ static int git_default_core_config(const char *var, const char *value)
 		return 0;
 	}
 
-	if (!strcmp(var, "core.pager"))
-		return git_config_string(&pager_program, var, value);
-
 	if (!strcmp(var, "core.editor"))
 		return git_config_string(&editor_program, var, value);
 
diff --git a/pager.c b/pager.c
index ae46da9..d747f50 100644
--- a/pager.c
+++ b/pager.c
@@ -35,6 +35,13 @@ static void wait_for_pager_signal(int signo)
 	raise(signo);
 }
 
+static int core_pager_config(const char *var, const char *value, void *data)
+{
+	if (!strcmp(var, "core.pager"))
+		return git_config_string(&pager_program, var, value);
+	return 0;
+}
+
 const char *git_pager(int stdout_is_tty)
 {
 	const char *pager;
@@ -45,7 +52,7 @@ const char *git_pager(int stdout_is_tty)
 	pager = getenv("GIT_PAGER");
 	if (!pager) {
 		if (!pager_program)
-			git_config(git_default_config, NULL);
+			git_config(core_pager_config, NULL);
 		pager = pager_program;
 	}
 	if (!pager)

cache.h, environment.c, pager.c

diff --git a/cache.h b/cache.h
index 6738050..4f23952 100644
--- a/cache.h
+++ b/cache.h
@@ -1786,7 +1786,6 @@ extern void write_file(const char *path, const char *fmt, ...);
 
 /* pager.c */
 extern void setup_pager(void);
-extern const char *pager_program;
 extern int pager_in_use(void);
 extern int pager_use_color;
 extern int term_columns(void);
diff --git a/environment.c b/environment.c
index ca72464..c266428 100644
--- a/environment.c
+++ b/environment.c
@@ -40,7 +40,6 @@ size_t packed_git_window_size = DEFAULT_PACKED_GIT_WINDOW_SIZE;
 size_t packed_git_limit = DEFAULT_PACKED_GIT_LIMIT;
 size_t delta_base_cache_limit = 96 * 1024 * 1024;
 unsigned long big_file_threshold = 512 * 1024 * 1024;
-const char *pager_program;
 int pager_use_color = 1;
 const char *editor_program;
 const char *askpass_program;
diff --git a/pager.c b/pager.c
index d747f50..8aa0a82 100644
--- a/pager.c
+++ b/pager.c
@@ -7,6 +7,7 @@
 #endif
 
 static struct child_process pager_process = CHILD_PROCESS_INIT;
+static const char *pager_program;
 
 static void wait_for_pager(int in_signal)
 {

diff --git a/pager.c b/pager.c
index 8aa0a82..46cc411 100644
--- a/pager.c
+++ b/pager.c
@@ -183,23 +183,42 @@ int decimal_width(uintmax_t number)
 	return width;
 }
 
-/* returns 0 for "no pager", 1 for "use pager", and -1 for "not specified" */
-int check_pager_config(const char *cmd)
+struct pager_command_config_data {
+	const char *cmd;
+	int want;
+	char *value;
+};
+
+static int pager_command_config(const char *var, const char *value, void *vdata)
 {
-	int want = -1;
-	struct strbuf key = STRBUF_INIT;
-	const char *value = NULL;
-	strbuf_addf(&key, "pager.%s", cmd);
-	if (git_config_key_is_valid(key.buf) &&
-	    !git_config_get_value(key.buf, &value)) {
-		int b = git_config_maybe_bool(key.buf, value);
+	struct pager_command_config_data *data = vdata;
+	const char *cmd;
+
+	if (skip_prefix(var, "pager.", &cmd) && !strcmp(cmd, data->cmd)) {
+		int b = git_config_maybe_bool(var, value);
 		if (b >= 0)
-			want = b;
+			data->want = b;
 		else {
-			want = 1;
-			pager_program = xstrdup(value);
+			data->want = 1;
+			data->value = xstrdup(value);
 		}
 	}
-	strbuf_release(&key);
-	return want;
+
+	return 0;
+}
+
+/* returns 0 for "no pager", 1 for "use pager", and -1 for "not specified" */
+int check_pager_config(const char *cmd)
+{
+	struct pager_command_config_data data;
+
+	data.cmd = cmd;
+	data.want = -1;
+	data.value = NULL;
+
+	git_config(pager_command_config, &data);
+
+	if (data.value)
+		pager_program = data.value;
+	return data.want;
 }

diff --git a/pager.c b/pager.c
index 46cc411..ae79643 100644
--- a/pager.c
+++ b/pager.c
@@ -43,6 +43,37 @@ static int core_pager_config(const char *var, const char *value, void *data)
 	return 0;
 }
 
+static void read_early_config(config_fn_t cb, void *data)
+{
+	git_config_with_options(cb, data, NULL, 1);
+
+	/*
+	 * Note that this is a really dirty hack that does the wrong thing in
+	 * many cases. The crux of the problem is that we cannot run
+	 * setup_git_directory() early on in git's setup, so we have no idea if
+	 * we are in a repository or not, and therefore are not sure whether
+	 * and how to read repository-local config.
+	 *
+	 * So if we _aren't_ in a repository (or we are but we would reject its
+	 * core.repositoryformatversion), we'll read whatever is in .git/config
+	 * blindly. Similarly, if we _are_ in a repository, but not at the
+	 * root, we'll fail to find .git/config (because it's really
+	 * ../.git/config, etc). See t7006 for a complete set of failures.
+	 *
+	 * However, we have historically provided this hack because it does
+	 * work some of the time (namely when you are at the top-level of a
+	 * valid repository), and would rarely make things worse (i.e., you do
+	 * not generally have a .git/config file sitting around).
+	 */
+	if (!startup_info->have_repository) {
+		struct git_config_source repo_config;
+
+		memset(&repo_config, 0, sizeof(repo_config));
+		repo_config.file = ".git/config";
+		git_config_with_options(cb, data, &repo_config, 1);
+	}
+}
+
 const char *git_pager(int stdout_is_tty)
 {
 	const char *pager;
@@ -53,7 +84,7 @@ const char *git_pager(int stdout_is_tty)
 	pager = getenv("GIT_PAGER");
 	if (!pager) {
 		if (!pager_program)
-			git_config(core_pager_config, NULL);
+			read_early_config(core_pager_config, NULL);
 		pager = pager_program;
 	}
 	if (!pager)
@@ -216,7 +247,7 @@ int check_pager_config(const char *cmd)
 	data.want = -1;
 	data.value = NULL;
 
-	git_config(pager_command_config, &data);
+	read_early_config(pager_command_config, &data);
 
 	if (data.value)
 		pager_program = data.value;

diff --git a/t/t1302-repo-version.sh b/t/t1302-repo-version.sh
index 9bcd349..f859809 100755
--- a/t/t1302-repo-version.sh
+++ b/t/t1302-repo-version.sh
@@ -25,10 +25,7 @@ test_expect_success 'setup' '
 test_expect_success 'gitdir selection on normal repos' '
 	echo 0 >expect &&
 	git config core.repositoryformatversion >actual &&
-	(
-		cd test &&
-		git config core.repositoryformatversion >../actual2
-	) &&
+	git -C test config core.repositoryformatversion >actual2 &&
 	test_cmp expect actual &&
 	test_cmp expect actual2
 '
@@ -36,35 +33,20 @@ test_expect_success 'gitdir selection on normal repos' '
 test_expect_success 'gitdir selection on unsupported repo' '
 	# Make sure it would stop at test2, not trash
 	echo 99 >expect &&
-	(
-		cd test2 &&
-		git config core.repositoryformatversion >../actual
-	) &&
+	git -C test2 config core.repositoryformatversion >actual &&
 	test_cmp expect actual
 '
 
 test_expect_success 'gitdir not required mode' '
 	git apply --stat test.patch &&
-	(
-		cd test &&
-		git apply --stat ../test.patch
-	) &&
-	(
-		cd test2 &&
-		git apply --stat ../test.patch
-	)
+	git -C test apply --stat ../test.patch &&
+	git -C test2 apply --stat ../test.patch
 '
 
 test_expect_success 'gitdir required mode' '
 	git apply --check --index test.patch &&
-	(
-		cd test &&
-		git apply --check --index ../test.patch
-	) &&
-	(
-		cd test2 &&
-		test_must_fail git apply --check --index ../test.patch
-	)
+	git -C test apply --check --index ../test.patch &&
+	test_must_fail git -C test2 apply --check --index ../test.patch
 '
 
 check_allow () {

diff --git a/t/helper/test-config.c b/t/helper/test-config.c
index 3c6d08c..83a4f2a 100644
--- a/t/helper/test-config.c
+++ b/t/helper/test-config.c
@@ -72,6 +72,9 @@ int cmd_main(int argc, const char **argv)
 	const char *v;
 	const struct string_list *strptr;
 	struct config_set cs;
+
+	setup_git_directory();
+
 	git_configset_init(&cs);
 
 	if (argc < 2) {

cache.h, config.c, environment.c, t/t0001-init.sh, t/t1301-shared-repo.sh, t/t1302-repo-version.sh

diff --git a/cache.h b/cache.h
index 4f23952..e9592d3 100644
--- a/cache.h
+++ b/cache.h
@@ -453,6 +453,12 @@ static inline enum object_type object_type(unsigned int mode)
  */
 extern const char * const local_repo_env[];
 
+/*
+ * Returns true iff we have a configured git repository (either via
+ * setup_git_directory, or in the environment via $GIT_DIR).
+ */
+int have_git_dir(void);
+
 extern int is_bare_repository_cfg;
 extern int is_bare_repository(void);
 extern int is_inside_git_dir(void);
diff --git a/config.c b/config.c
index 8b28447..1e4b617 100644
--- a/config.c
+++ b/config.c
@@ -1286,7 +1286,7 @@ static int do_git_config_sequence(config_fn_t fn, void *data)
 	int ret = 0;
 	char *xdg_config = xdg_config_home("config");
 	char *user_config = expand_user_path("~/.gitconfig");
-	char *repo_config = git_pathdup("config");
+	char *repo_config = have_git_dir() ? git_pathdup("config") : NULL;
 
 	current_parsing_scope = CONFIG_SCOPE_SYSTEM;
 	if (git_config_system() && !access_or_die(git_etc_gitconfig(), R_OK, 0))
diff --git a/environment.c b/environment.c
index c266428..c0cce6b 100644
--- a/environment.c
+++ b/environment.c
@@ -195,6 +195,13 @@ int is_bare_repository(void)
 	return is_bare_repository_cfg && !get_git_work_tree();
 }
 
+int have_git_dir(void)
+{
+	return startup_info->have_repository
+		|| git_dir
+		|| getenv(GIT_DIR_ENVIRONMENT);
+}
+
 const char *get_git_dir(void)
 {
 	if (!git_dir)
diff --git a/t/t0001-init.sh b/t/t0001-init.sh
index a6fdd5e..8ffbbea 100755
--- a/t/t0001-init.sh
+++ b/t/t0001-init.sh
@@ -384,4 +384,13 @@ test_expect_success MINGW 'bare git dir not hidden' '
 	! is_hidden newdir
 '
 
+test_expect_success 'remote init from does not use config from cwd' '
+	rm -rf newdir &&
+	test_config core.logallrefupdates true &&
+	git init newdir &&
+	echo true >expect &&
+	git -C newdir config --bool core.logallrefupdates >actual &&
+	test_cmp expect actual
+'
+
 test_done
diff --git a/t/t1301-shared-repo.sh b/t/t1301-shared-repo.sh
index ac10875..7c28642 100755
--- a/t/t1301-shared-repo.sh
+++ b/t/t1301-shared-repo.sh
@@ -172,4 +172,13 @@ test_expect_success POSIXPERM 'forced modes' '
 	}" actual)"
 '
 
+test_expect_success POSIXPERM 'remote init does not use config from cwd' '
+	git config core.sharedrepository 0666 &&
+	umask 0022 &&
+	git init --bare child.git &&
+	echo "-rw-r--r--" >expect &&
+	modebits child.git/config >actual &&
+	test_cmp expect actual
+'
+
 test_done
diff --git a/t/t1302-repo-version.sh b/t/t1302-repo-version.sh
index f859809..ce4cff1 100755
--- a/t/t1302-repo-version.sh
+++ b/t/t1302-repo-version.sh
@@ -32,9 +32,7 @@ test_expect_success 'gitdir selection on normal repos' '
 
 test_expect_success 'gitdir selection on unsupported repo' '
 	# Make sure it would stop at test2, not trash
-	echo 99 >expect &&
-	git -C test2 config core.repositoryformatversion >actual &&
-	test_cmp expect actual
+	test_expect_code 1 git -C test2 config core.repositoryformatversion >actual
 '
 
 test_expect_success 'gitdir not required mode' '

diff --git a/builtin/init-db.c b/builtin/init-db.c
index 3a45f0b..e935895 100644
--- a/builtin/init-db.c
+++ b/builtin/init-db.c
@@ -191,16 +191,19 @@ static int create_default_files(const char *template_path)
 	/* Just look for `init.templatedir` */
 	git_config(git_init_db_config, NULL);
 
-	/* First copy the templates -- we might have the default
+	/*
+	 * First copy the templates -- we might have the default
 	 * config file there, in which case we would want to read
 	 * from it after installing.
 	 */
 	copy_templates(template_path);
-
 	git_config(git_default_config, NULL);
-	is_bare_repository_cfg = init_is_bare_repository;
 
-	/* reading existing config may have overwrote it */
+	/*
+	 * We must make sure command-line options continue to override any
+	 * values we might have just re-read from the config.
+	 */
+	is_bare_repository_cfg = init_is_bare_repository;
 	if (init_shared_repository != -1)
 		set_shared_repository(init_shared_repository);
 

builtin/init-db.c, cache.h, environment.c, t/t1301-shared-repo.sh

diff --git a/builtin/init-db.c b/builtin/init-db.c
index e935895..cea4550 100644
--- a/builtin/init-db.c
+++ b/builtin/init-db.c
@@ -195,8 +195,14 @@ static int create_default_files(const char *template_path)
 	 * First copy the templates -- we might have the default
 	 * config file there, in which case we would want to read
 	 * from it after installing.
+	 *
+	 * Before reading that config, we also need to clear out any cached
+	 * values (since we've just potentially changed what's available on
+	 * disk).
 	 */
 	copy_templates(template_path);
+	git_config_clear();
+	reset_shared_repository();
 	git_config(git_default_config, NULL);
 
 	/*
diff --git a/cache.h b/cache.h
index e9592d3..4c8d85b 100644
--- a/cache.h
+++ b/cache.h
@@ -671,8 +671,15 @@ extern size_t delta_base_cache_limit;
 extern unsigned long big_file_threshold;
 extern unsigned long pack_size_limit_cfg;
 
+/*
+ * Accessors for the core.sharedrepository config which lazy-load the value
+ * from the config (if not already set). The "reset" function can be
+ * used to unset "set" or cached value, meaning that the value will be loaded
+ * fresh from the config file on the next call to get_shared_repository().
+ */
 void set_shared_repository(int value);
 int get_shared_repository(void);
+void reset_shared_repository(void);
 
 /*
  * Do replace refs need to be checked this run?  This variable is
diff --git a/environment.c b/environment.c
index c0cce6b..cd5aa57 100644
--- a/environment.c
+++ b/environment.c
@@ -351,3 +351,8 @@ int get_shared_repository(void)
 	}
 	return the_shared_repository;
 }
+
+void reset_shared_repository(void)
+{
+	need_shared_repository_from_config = 1;
+}
diff --git a/t/t1301-shared-repo.sh b/t/t1301-shared-repo.sh
index 7c28642..1312004 100755
--- a/t/t1301-shared-repo.sh
+++ b/t/t1301-shared-repo.sh
@@ -181,4 +181,36 @@ test_expect_success POSIXPERM 'remote init does not use config from cwd' '
 	test_cmp expect actual
 '
 
+test_expect_success POSIXPERM 're-init respects core.sharedrepository (local)' '
+	git config core.sharedrepository 0666 &&
+	umask 0022 &&
+	echo whatever >templates/foo &&
+	git init --template=templates &&
+	echo "-rw-rw-rw-" >expect &&
+	modebits .git/foo >actual &&
+	test_cmp expect actual
+'
+
+test_expect_success POSIXPERM 're-init respects core.sharedrepository (remote)' '
+	rm -rf child.git &&
+	umask 0022 &&
+	git init --bare --shared=0666 child.git &&
+	test_path_is_missing child.git/foo &&
+	git init --bare --template=../templates child.git &&
+	echo "-rw-rw-rw-" >expect &&
+	modebits child.git/foo >actual &&
+	test_cmp expect actual
+'
+
+test_expect_success POSIXPERM 'template can set core.sharedrepository' '
+	rm -rf child.git &&
+	umask 0022 &&
+	git config core.sharedrepository 0666 &&
+	cp .git/config templates/config &&
+	git init --bare --template=../templates child.git &&
+	echo "-rw-rw-rw-" >expect &&
+	modebits child.git/HEAD >actual &&
+	test_cmp expect actual
+'
+
 test_done