Problem unlinking when checking out individual files

Local Repro

C:\gvfs_repos>gvfs clone https://gvfs.visualstudio.com/ci/_git/ForTests ft
Clone parameters:
Repo URL: https://gvfs.visualstudio.com/ci/_git/ForTests
Branch: Default
Cache Server: Default
Local Cache: C:.gvfsCache
Destination: C:\gvfs_repos\ft
Authenticating...Succeeded
Querying remote for config...Succeeded
Using cache server: None (https://gvfs.visualstudio.com/ci/_git/ForTests)
Cloning...Succeeded
Fetching commits and trees from origin (no cache server)...Succeeded
Validating repo...Succeeded
Mounting...Succeeded
Registering for automount...Succeeded

C:\gvfs_repos>cd ft\src

C:\gvfs_repos\ft\src>git status
On branch master
Your branch is up to date with 'origin/master'.

nothing to commit, working tree clean

C:\gvfs_repos\ft\src>git checkout origin/FunctionalTests/20180214 -- Readme.md
error: unable to unlink old 'Readme.md': No such file or directory

C:\gvfs_repos\ft\src>type Readme.md >..\test.txt

C:\gvfs_repos\ft\src>git checkout origin/FunctionalTests/20180214 -- Readme.md
error: pathspec 'Readme.md' did not match any file(s) known to git

C:\gvfs_repos\ft\src>git checkout --ignore-skip-worktree-bits origin/FunctionalTests/20180214 -- Readme.md

Start by reproducing the reported Windows checkout sequence in the VFSForGit repository: clone ForTests, enter src, and run git checkout origin/FunctionalTests/20180214 -- Readme.md. Compare the initial checkout failure and the later pathspec error, then trace the individual-file checkout and unlink handling. Done means checking out Readme.md succeeds without the unlink error and leaves the expected file content.