diff --git a/plugins/git4idea/src/git4idea/branch/GitBranchOperation.java b/plugins/git4idea/src/git4idea/branch/GitBranchOperation.java
index 073e1d434ab8..7b093ecf4d9f 100644
--- a/plugins/git4idea/src/git4idea/branch/GitBranchOperation.java
+++ b/plugins/git4idea/src/git4idea/branch/GitBranchOperation.java
@@ -25,12 +25,14 @@ import com.intellij.openapi.project.Project;
 import com.intellij.openapi.util.Pair;
 import com.intellij.openapi.util.text.StringUtil;
 import com.intellij.openapi.vcs.BranchChangeListener;
-import com.intellij.openapi.vcs.VcsException;
+import com.intellij.openapi.vcs.FilePath;
 import com.intellij.openapi.vcs.VcsNotifier;
 import com.intellij.openapi.vcs.changes.Change;
+import com.intellij.openapi.vcs.changes.ChangesUtil;
 import com.intellij.openapi.vfs.VirtualFile;
 import com.intellij.util.containers.MultiMap;
 import git4idea.GitUtil;
+import git4idea.changes.GitChangeUtils;
 import git4idea.commands.Git;
 import git4idea.commands.GitMessageWithFilesDetector;
 import git4idea.config.GitVcsSettings;
@@ -43,6 +45,7 @@ import java.util.*;
 import static com.intellij.openapi.util.text.StringUtil.pluralize;
 import static com.intellij.util.ObjectUtils.chooseNotNull;
 import static git4idea.GitUtil.getRepositoryManager;
+import static java.util.stream.Collectors.toList;
 
 /**
  * Common class for Git operations with branches aware of multi-root configuration,
@@ -344,27 +347,22 @@ abstract class GitBranchOperation {
   }
 
   /**
-   * TODO this is non-optimal and even incorrect, since such diff shows the difference between committed changes
    * For each of the given repositories looks to the diff between current branch and the given branch and converts it to the list of
    * local changes.
    */
   @NotNull
   Map<GitRepository, List<Change>> collectLocalChangesConflictingWithBranch(@NotNull Collection<GitRepository> repositories,
-                                                                            @NotNull String currentBranch, @NotNull String otherBranch) {
+                                                                            @NotNull String otherBranch) {
     Map<GitRepository, List<Change>> changes = new HashMap<>();
     for (GitRepository repository : repositories) {
-      try {
-        Collection<String> diff = GitUtil.getPathsDiffBetweenRefs(myGit, repository, currentBranch, otherBranch);
+      Collection<Change> diffWithWorkingTree = GitChangeUtils.getDiffWithWorkingTree(repository, otherBranch, false);
+      if (diffWithWorkingTree != null) {
+        List<String> diff = ChangesUtil.getPaths(diffWithWorkingTree.stream()).map(FilePath::getPath).collect(toList());
         List<Change> changesInRepo = GitUtil.findLocalChangesForPaths(myProject, repository.getRoot(), diff, false);
         if (!changesInRepo.isEmpty()) {
           changes.put(repository, changesInRepo);
         }
       }
-      catch (VcsException e) {
-        // ignoring the exception: this is not fatal if we won't collect such a diff from other repositories.
-        // At worst, use will get double dialog proposing the smart checkout.
-        LOG.warn(String.format("Couldn't collect diff between %s and %s in %s", currentBranch, otherBranch, repository.getRoot()), e);
-      }
     }
     return changes;
   }
@@ -392,7 +390,7 @@ abstract class GitBranchOperation {
     // get all other conflicting changes
     // get changes in all other repositories (except those which already have succeeded) to avoid multiple dialogs proposing smart checkout
     Map<GitRepository, List<Change>> conflictingChangesInRepositories =
-      collectLocalChangesConflictingWithBranch(getRemainingRepositoriesExceptGiven(currentRepository), currentBranch, nextBranch);
+      collectLocalChangesConflictingWithBranch(getRemainingRepositoriesExceptGiven(currentRepository), nextBranch);
 
     Set<GitRepository> otherProblematicRepositories = conflictingChangesInRepositories.keySet();
     List<GitRepository> allConflictingRepositories = new ArrayList<>(otherProblematicRepositories);
diff --git a/plugins/git4idea/tests/git4idea/branch/GitBranchWorkerTest.kt b/plugins/git4idea/tests/git4idea/branch/GitBranchWorkerTest.kt
index 8ff3bb670ec7..35d7f7ee4d9c 100644
--- a/plugins/git4idea/tests/git4idea/branch/GitBranchWorkerTest.kt
+++ b/plugins/git4idea/tests/git4idea/branch/GitBranchWorkerTest.kt
@@ -405,13 +405,25 @@ class GitBranchWorkerTest : GitPlatformTest() {
   fun `test local changes would be overwritten in several repositories`() {
     val local1 = "local1.txt"
     localChangesOverwrittenByWithoutConflict(first, "feature", listOf(local1))
-    val local2 = "local2.txt"
-    localChangesOverwrittenByWithoutConflict(second, "feature", listOf(local2))
-    val file1 = File(first.root.path, local1)
-    val file2 = File(second.root.path, local2)
-    val expectedLocalChanges = listOf(file1, file2).map { FileUtil.toSystemIndependentName(it.path) }
+
+    // in addition to a local change preventing checkout...
+    cd(second)
+    val local2 = second.file("local2.txt")
+    local2.create(LOCAL_CHANGES_OVERWRITTEN_BY.initial).addCommit("initial-local2")
+    git("checkout -b feature")
+    local2.prepend(LOCAL_CHANGES_OVERWRITTEN_BY.branchLine).addCommit("feature-local2")
+    // ... make another file producing diff between master and feature (but not related to the 'local change would be overwritten' error)
+    second.file("feature.txt").create("feature\n").addCommit("feature.txt")
+    git("checkout master")
+    local2.append(LOCAL_CHANGES_OVERWRITTEN_BY.masterLine)
+
     cd(last)
     git("branch feature")
+
+    val file1 = File(first.root.path, local1)
+    val file2 = local2.file
+    val expectedLocalChanges = listOf(file1, file2).map { FileUtil.toSystemIndependentName(it.path) }
+
     updateChangeListManager()
 
     var smartOperationDialogTimes = 0
diff --git a/plugins/git4idea/tests/git4idea/test/GitExecutor.kt b/plugins/git4idea/tests/git4idea/test/GitExecutor.kt
index ac34db7e9d43..e0dd2aed4a5b 100644
--- a/plugins/git4idea/tests/git4idea/test/GitExecutor.kt
+++ b/plugins/git4idea/tests/git4idea/test/GitExecutor.kt
@@ -209,4 +209,12 @@ internal class TestFile internal constructor(val repo: GitRepository, val file:
   fun exists() = file.exists()
 
   fun read() = FileUtil.loadFile(file)
+
+  fun cat(): String = FileUtil.loadFile(file)
+
+  fun prepend(content: String): TestFile {
+    val previousContent = cat()
+    FileUtil.writeToFile(file, content + previousContent)
+    return this
+  }
 }