Here's an example run of the new logic:

When I answered "y" to the first prompt on a previous run (with no local commit), it popped $EDITOR properly.

This might be a little hard to follow, but the old logic was like:

do stuff for untracked files;
do weird magic;
do stuff for unstaged files;
more weird magic;
do stuff for uncommitted files;
all weird magic conspires;

New logic is more like:

tell the user about all the problems;
do weird magic