diff --git a/.circleci/config.yml b/.circleci/config.yml
index 9b5c16f7..9675b616 100644
--- a/.circleci/config.yml
+++ b/.circleci/config.yml
@@ -7,6 +7,10 @@ jobs:
     description: Runs NUTs from other (external) repos by cloning them.  Substitutes a dependency for the current pull request.  For example, you're testing a PR to a library and want to test a plugin in another repo that uses the library.
 
     parameters:
+      test_command:
+        type: string
+        description: 'command to execute (ex: yarn test:nuts)'
+        default: 'yarn test:nuts'
       node_version:
         description: version of node to run tests against
         type: string
@@ -106,7 +110,7 @@ jobs:
       - run:
           name: Nuts
           command: |
-            yarn test:nuts:tracking
+            <<parameters.test_command>>
 
 workflows:
   version: 2
@@ -155,12 +159,22 @@ workflows:
             - release-management/test-package
             - release-management/test-nut
           sfdx_version: latest
-          size: large
+          size: medium
           matrix:
             parameters:
               os: [linux, windows]
               node_version: [lts]
               external_project_git_url: ['https://github.com/salesforcecli/plugin-source']
+              test_command:
+                [
+                  'yarn test:nuts:tracking:basics',
+                  'yarn test:nuts:tracking:conflicts',
+                  'yarn test:nuts:tracking:forceignore',
+                  'yarn test:nuts:tracking:remote',
+                  'yarn test:nuts:tracking:resetClear',
+                  'yarn test:nuts:tracking:lwc',
+                  'yarn mocha "test/nuts/trackingCommands/mpd-*.nut.ts" --slow 3000 --timeout 600000 --parallel',
+                ]
       - release-management/release-package:
           github-release: true
           requires:
diff --git a/src/shared/localShadowRepo.ts b/src/shared/localShadowRepo.ts
index 65f2a06d..deeebf1b 100644
--- a/src/shared/localShadowRepo.ts
+++ b/src/shared/localShadowRepo.ts
@@ -79,6 +79,7 @@ export class ShadowRepo {
       this.logger.debug('initializing git repo');
       await this.gitInit();
     }
+    await this.locateIgnoreFiles();
   }
 
   /**
@@ -88,7 +89,6 @@ export class ShadowRepo {
   public async gitInit(): Promise<void> {
     await fs.promises.mkdir(this.gitDir, { recursive: true });
     await git.init({ fs, dir: this.projectPath, gitdir: this.gitDir, defaultBranch: 'main' });
-    await this.locateIgnoreFiles();
   }
 
   /**
@@ -265,17 +265,11 @@ export class ShadowRepo {
         dir: this.projectPath,
         gitdir: this.gitDir,
         trees: [git.WORKDIR()],
-        // TODO: this can be marginally faster if we limit it to pkgDirs and toplevel project files
         // eslint-disable-next-line @typescript-eslint/require-await
         map: async (filepath: string) => filepath,
       })) as string[]
     )
-      .filter(
-        (filepath) =>
-          filepath.includes(gitIgnoreFileName) &&
-          // can be top-level like '.' (no sep) OR must be in one of the package dirs
-          (!filepath.includes(path.sep) || this.packageDirs.some((dir) => pathIsInFolder(filepath, dir.name)))
-      )
+      .filter((filepath) => filepath.includes(gitIgnoreFileName))
       .map((ignoreFile) => path.join(this.projectPath, ignoreFile));
   }
 
diff --git a/test/nuts/local/nonTopLevelIgnore.nut.ts b/test/nuts/local/nonTopLevelIgnore.nut.ts
index a40cf36e..36c06502 100644
--- a/test/nuts/local/nonTopLevelIgnore.nut.ts
+++ b/test/nuts/local/nonTopLevelIgnore.nut.ts
@@ -10,7 +10,7 @@ import { fs } from '@salesforce/core';
 import { expect } from 'chai';
 import { ShadowRepo } from '../../../src/shared/localShadowRepo';
 
-describe('handles non-top-level ignore', () => {
+describe('handles non-top-level ignore inside project dir', () => {
   let session: TestSession;
   let repo: ShadowRepo;
 
@@ -43,3 +43,37 @@ describe('handles non-top-level ignore', () => {
     await session?.clean();
   });
 });
+
+describe('handles non-top-level ignore outside project dir', () => {
+  let session: TestSession;
+  let repo: ShadowRepo;
+
+  before(async () => {
+    session = await TestSession.create({
+      project: {
+        sourceDir: path.join('test', 'nuts', 'repros', 'nested-classes2'),
+      },
+      authStrategy: 'NONE',
+    });
+  });
+
+  it('initialize the local tracking', async () => {
+    repo = await ShadowRepo.getInstance({
+      orgId: 'fakeOrgId2',
+      projectPath: session.project.dir,
+      packageDirs: [{ path: 'classes', name: 'classes', fullPath: path.join(session.project.dir, 'classes') }],
+    });
+    // verify the local tracking files/directories
+    expect(fs.existsSync(repo.gitDir));
+  });
+
+  it('should not be influenced by gitignore', async () => {
+    expect(await repo.getChangedFilenames())
+      .to.be.an('array')
+      .with.length(2);
+  });
+
+  after(async () => {
+    await session?.clean();
+  });
+});