diff --git a/source/git/source.go b/source/git/source.go
index e9fc50320..67a3b13e1 100644
--- a/source/git/source.go
+++ b/source/git/source.go
@@ -500,8 +500,8 @@ func (gs *gitSourceHandler) Snapshot(ctx context.Context, g session.Group) (cach
 	ref, err := gs.trySnapshot(ctx, g, false)
 	if err != nil {
 		var wce *wouldClobberExistingTagError
-		if errors.As(err, &wce) {
-			// try once more with a fresh repo
+		var ulre *unableToUpdateLocalRefError
+		if errors.As(err, &wce) || errors.As(err, &ulre) {
 			ref, err = gs.trySnapshot(ctx, g, true)
 			if err != nil {
 				return nil, err
@@ -581,6 +581,11 @@ func (gs *gitSourceHandler) trySnapshot(ctx context.Context, g session.Group, re
 				// only hope is to abandon the existing shared repo and start a fresh one
 				return nil, &wouldClobberExistingTagError{err}
 			}
+			if strings.Contains(err.Error(), "(unable to update local ref)") && strings.Contains(err.Error(), "some local refs could not be updated;") {
+				// this can happen if a branch updated in remote so that old branch
+				// is now a parent dir of a new branch
+				return nil, &unableToUpdateLocalRefError{err}
+			}
 
 			return nil, err
 		}
@@ -794,6 +799,14 @@ func (e *wouldClobberExistingTagError) Unwrap() error {
 	return e.error
 }
 
+type unableToUpdateLocalRefError struct {
+	error
+}
+
+func (e *unableToUpdateLocalRefError) Unwrap() error {
+	return e.error
+}
+
 func (gs *gitSourceHandler) emptyGitCli(ctx context.Context, g session.Group, opts ...gitutil.Option) (*gitutil.GitCLI, func() error, error) {
 	var cleanups []func() error
 	cleanup := func() error {
diff --git a/source/git/source_test.go b/source/git/source_test.go
index 98821cd8b..e7b29954a 100644
--- a/source/git/source_test.go
+++ b/source/git/source_test.go
@@ -915,6 +915,89 @@ func testFetchMutatedTag(t *testing.T, format string, keepGitDir bool) {
 	ref.Release(context.TODO())
 }
 
+func TestFetchMutatedBranchSHA1(t *testing.T) {
+	testFetchMutatedBranch(t, "sha1", false)
+}
+
+func TestFetchMutatedBranchKeepGitDirSHA1(t *testing.T) {
+	testFetchMutatedBranch(t, "sha1", true)
+}
+
+func TestFetchMutatedBranchSHA256(t *testing.T) {
+	testFetchMutatedBranch(t, "sha256", false)
+}
+
+func TestFetchMutatedBranchKeepGitDirSHA256(t *testing.T) {
+	testFetchMutatedBranch(t, "sha256", true)
+}
+
+// testFetchMutatedBranch tests that if a branch is mutated in a way that previous
+// ref becomes parent directory of new ref, causing collision to existing checkouts
+func testFetchMutatedBranch(t *testing.T, format string, keepGitDir bool) {
+	ctx := t.Context()
+	if runtime.GOOS == "windows" {
+		t.Skip("Depends on unimplemented containerd bind-mount support on Windows")
+	}
+	repo := setupGitRepo(t, format)
+	cmd := exec.Command("git", "rev-parse", "feature")
+	cmd.Dir = repo.mainPath
+
+	out, err := cmd.Output()
+	require.NoError(t, err)
+
+	expLen := 40
+	if format == "sha256" {
+		expLen = 64
+	}
+	shaBranch := strings.TrimSpace(string(out))
+	require.Equal(t, expLen, len(shaBranch))
+
+	id := &GitIdentifier{Remote: repo.mainURL, Ref: "feature", KeepGitDir: keepGitDir}
+	gs := setupGitSource(t, t.TempDir())
+
+	g, err := gs.Resolve(ctx, id, nil, nil)
+	require.NoError(t, err)
+
+	key1, pin1, _, done, err := g.CacheKey(ctx, nil, 0)
+	require.NoError(t, err)
+	require.True(t, done)
+
+	ref, err := g.Snapshot(ctx, nil)
+	require.NoError(t, err)
+	ref.Release(context.TODO())
+
+	// mutate the branch to point to become parent dir
+	cmd = exec.Command("git", "branch", "-D", "feature")
+	cmd.Dir = repo.mainPath
+	out, err = cmd.CombinedOutput()
+	require.NoError(t, err, string(out))
+
+	cmd = exec.Command("git", "branch", "feature/new", shaBranch)
+	cmd.Dir = repo.mainPath
+	out, err = cmd.CombinedOutput()
+	require.NoError(t, err, string(out))
+
+	id = &GitIdentifier{Remote: repo.mainURL, Ref: "feature/new", KeepGitDir: keepGitDir}
+
+	g, err = gs.Resolve(ctx, id, nil, nil)
+	require.NoError(t, err)
+
+	key2, pin2, _, done, err := g.CacheKey(ctx, nil, 0)
+	require.NoError(t, err)
+	require.True(t, done)
+
+	if keepGitDir {
+		require.NotEqual(t, key1, key2) // key contains new ref
+	} else {
+		require.Equal(t, key1, key2)
+	}
+	require.Equal(t, pin1, pin2)
+
+	ref, err = g.Snapshot(ctx, nil)
+	require.NoError(t, err)
+	ref.Release(context.TODO())
+}
+
 func TestMultipleTagAccessKeepGitDirSHA1(t *testing.T) {
 	testMultipleTagAccess(t, true, "sha1")
 }