git-add fails after file type change

[Steven Grimm <koreth@midwinter.com>]

In the course of experimenting with using git for my snapshot backups, I 
ran into what looks like a bug in git-add: it croaks when it tries to 
add a file whose type has changed, specifically when a directory gets 
moved and a symbolic link is put in the old location pointing to the new 
one. Here's a simple test case:

$ git init-db
defaulting to local storage area
$ mkdir dir
$ echo foo > dir/file
$ git add .
$ git commit -m "initial commit" -a
Committing initial tree f4bc9c50d08b041f5e096fa68e243c34170f1cd8
 create mode 100644 dir/file
$ mv dir dir.real
$ ln -s dir.real dir
$ git add .
fatal: unable to add dir to index

Is "git add ." the wrong thing to do here? I have been using it as a 
generic "pick up all the files I haven't added yet" command. Or is this 
a bug?

For what it's worth, "git update-index dir" and "git update-index --add 
dir" both fail too.