diff --git a/dir.c b/dir.c
index fecb6da0ae..fd4aeae3e7 100644
--- a/dir.c
+++ b/dir.c
@@ -1447,12 +1447,14 @@ static int treat_leading_path(struct dir_struct *dir,
 	struct strbuf sb = STRBUF_INIT;
 	int baselen, rc = 0;
 	const char *cp;
+	int old_flags = dir->flags;
 
 	while (len && path[len - 1] == '/')
 		len--;
 	if (!len)
 		return 1;
 	baselen = 0;
+	dir->flags &= ~DIR_SHOW_OTHER_DIRECTORIES;
 	while (1) {
 		cp = path + baselen + !!baselen;
 		cp = memchr(cp, '/', path + len - cp);
@@ -1475,6 +1477,7 @@ static int treat_leading_path(struct dir_struct *dir,
 		}
 	}
 	strbuf_release(&sb);
+	dir->flags = old_flags;
 	return rc;
 }
 
diff --git a/t/t7061-wtstatus-ignore.sh b/t/t7061-wtstatus-ignore.sh
index 6171a49cf9..4c6f145d97 100755
--- a/t/t7061-wtstatus-ignore.sh
+++ b/t/t7061-wtstatus-ignore.sh
@@ -32,6 +32,25 @@ test_expect_success 'status untracked directory with --ignored -u' '
 	git status --porcelain --ignored -u >actual &&
 	test_cmp expected actual
 '
+cat >expected <<\EOF
+?? untracked/uncommitted
+!! untracked/ignored
+EOF
+
+test_expect_success 'status prefixed untracked directory with --ignored' '
+	git status --porcelain --ignored untracked/ >actual &&
+	test_cmp expected actual
+'
+
+cat >expected <<\EOF
+?? untracked/uncommitted
+!! untracked/ignored
+EOF
+
+test_expect_success 'status prefixed untracked sub-directory with --ignored -u' '
+	git status --porcelain --ignored -u untracked/ >actual &&
+	test_cmp expected actual
+'
 
 cat >expected <<\EOF
 ?? .gitignore