Plug a bunch of leaks

Fixes

Test that workdir diffs, when presented with UPDATE_INDEX, only
write the index when they actually make a change.

Fallback describes the mechanism, while unspecified explains what the
user is thinking.

Remove run-time configuration settings from submodules

Ensure that even when we're forcing a binary diff that we do not
assume that there *is* a diff.  There should be an empty diff for
no change.