diff --git a/dir.c b/dir.c
index 151cc37e23..66261cf98b 100644
--- a/dir.c
+++ b/dir.c
@@ -1835,6 +1835,7 @@ static enum path_treatment treat_directory(struct dir_struct *dir,
 	}
 
 	/* This is the "show_other_directories" case */
+	assert(dir->flags & DIR_SHOW_OTHER_DIRECTORIES);
 
 	/*
 	 * If we have a pathspec which could match something _below_ this
@@ -1845,27 +1846,40 @@ static enum path_treatment treat_directory(struct dir_struct *dir,
 	if (matches_how == MATCHED_RECURSIVELY_LEADING_PATHSPEC)
 		return path_recurse;
 
+	/* Special cases for where this directory is excluded/ignored */
+	if (excluded) {
+		/*
+		 * In the show_other_directories case, if we're not
+		 * hiding empty directories, there is no need to
+		 * recurse into an ignored directory.
+		 */
+		if (!(dir->flags & DIR_HIDE_EMPTY_DIRECTORIES))
+			return path_excluded;
+
+		/*
+		 * Even if we are hiding empty directories, we can still avoid
+		 * recursing into ignored directories for DIR_SHOW_IGNORED_TOO
+		 * if DIR_SHOW_IGNORED_TOO_MODE_MATCHING is also set.
+		 */
+		if ((dir->flags & DIR_SHOW_IGNORED_TOO) &&
+		    (dir->flags & DIR_SHOW_IGNORED_TOO_MODE_MATCHING))
+			return path_excluded;
+	}
+
 	/*
-	 * Other than the path_recurse case immediately above, we only need
-	 * to recurse into untracked/ignored directories if either of the
-	 * following bits is set:
+	 * Other than the path_recurse case above, we only need to
+	 * recurse into untracked directories if either of the following
+	 * bits is set:
 	 *   - DIR_SHOW_IGNORED_TOO (because then we need to determine if
 	 *                           there are ignored entries below)
 	 *   - DIR_HIDE_EMPTY_DIRECTORIES (because we have to determine if
 	 *                                 the directory is empty)
 	 */
-	if (!(dir->flags & (DIR_SHOW_IGNORED_TOO | DIR_HIDE_EMPTY_DIRECTORIES)))
-		return excluded ? path_excluded : path_untracked;
-
-	/*
-	 * ...and even if DIR_SHOW_IGNORED_TOO is set, we can still avoid
-	 * recursing into ignored directories if the path is excluded and
-	 * DIR_SHOW_IGNORED_TOO_MODE_MATCHING is also set.
-	 */
-	if (excluded &&
-	    (dir->flags & DIR_SHOW_IGNORED_TOO) &&
-	    (dir->flags & DIR_SHOW_IGNORED_TOO_MODE_MATCHING))
-		return path_excluded;
+	if (!excluded &&
+	    !(dir->flags & (DIR_SHOW_IGNORED_TOO |
+			    DIR_HIDE_EMPTY_DIRECTORIES))) {
+		return path_untracked;
+	}
 
 	/*
 	 * Even if we don't want to know all the paths under an untracked or
diff --git a/t/t7300-clean.sh b/t/t7300-clean.sh
index 34c08c3254..21e48b3ba5 100755
--- a/t/t7300-clean.sh
+++ b/t/t7300-clean.sh
@@ -746,7 +746,7 @@ test_expect_success 'clean untracked paths by pathspec' '
 	test_must_be_empty actual
 '
 
-test_expect_failure 'avoid traversing into ignored directories' '
+test_expect_success 'avoid traversing into ignored directories' '
 	test_when_finished rm -f output error trace.* &&
 	test_create_repo avoid-traversing-deep-hierarchy &&
 	(