diff --git a/gclient_scm.py b/gclient_scm.py
index 60958b5cc..9891e4919 100644
--- a/gclient_scm.py
+++ b/gclient_scm.py
@@ -583,9 +583,9 @@ class GitWrapper(SCMWrapper):
         config = subprocess2.capture(
             ['git', 'config', '-l'],
             cwd=args[0].checkout_path).decode('utf-8').strip().splitlines()
-        if 'diff.ignoresubmodules=all' in config:
+        if 'diff.ignoresubmodules=dirty' not in config:
           subprocess2.capture(
-              ['git', 'config', '--unset', 'diff.ignoreSubmodules'],
+              ['git', 'config', 'diff.ignoreSubmodules', 'dirty'],
               cwd=args[0].checkout_path)
         if 'fetch.recursesubmodules=off' not in config:
           subprocess2.capture(
diff --git a/tests/gclient_scm_test.py b/tests/gclient_scm_test.py
index dc6dfc0ae..b7b101f17 100755
--- a/tests/gclient_scm_test.py
+++ b/tests/gclient_scm_test.py
@@ -407,31 +407,17 @@ class ManagedGitWrapperTestCase(BaseGitWrapperTestCase):
     scm = gclient_scm.GitWrapper(self.url, self.root_dir,
                                  self.relpath)
     file_list = []
-    scm._Capture(['config', 'diff.ignoreSubmodules', 'all'])
 
     scm.update(options, (), file_list)
     self.assertEqual(file_list, expected_file_list)
     self.assertEqual(scm.revinfo(options, (), None),
                       'a7142dc9f0009350b96a11f372b6ea658592aa95')
-    with self.assertRaises(Exception):
-      scm._Capture(['config', '--get', 'diff.ignoreSubmodules'])
+    self.assertEqual(scm._Capture(['config', '--get', 'diff.ignoreSubmodules']),
+                     'dirty')
     self.assertEqual(
         scm._Capture(['config', '--get', 'fetch.recurseSubmodules']), 'off')
     sys.stdout.close()
 
-  def testUpdateUpdate_only_unset_ignoresubmodules_all(self):
-    if not self.enabled:
-      return
-    options = self.Options()
-    scm = gclient_scm.GitWrapper(self.url, self.root_dir, self.relpath)
-    file_list = []
-    scm._Capture(['config', 'diff.ignoreSubmodules', 'none'])
-
-    scm.update(options, (), file_list)
-    self.assertEqual(scm._Capture(['config', '--get', 'diff.ignoreSubmodules']),
-                     'none')
-    sys.stdout.close()
-
   def testUpdateMerge(self):
     if not self.enabled:
       return