Your comments

This is no purely local operation and hence would take a significant time.

Just clone the repository without submodules. Then you can initialize them selectively.

This could take some time and the refresh performance would become worse.

There is no way to determine from the locally available information whether a tag is local only or exists in a remote as well.

Changing the default behavior in an application with >100k business users would be a bad choice.

OK, let's discuss this further. Normally, a change in the selection of the Files view should cause to show the file changes in the Changes view. If it became changed by the user, it should visually noticable disconnect from the selection change in the Files view and offer a Save or Discard option. If either is selected, it would listen again for selection changes in the Files view, right?

Should the Changes view be editable directly or should it be made editable by an explicit action, e.g., by a toolbar button click?