Mirror repository for blank project fails

Summary

Pull from a remote repository fails for a blank repository because master branch is created when Mirror repository is set.

Steps to reproduce

• Create a new project
• Navigate to /settings/repository
• Scroll down to Pull from a remote repository
• Select Mirror repository and add Git repository URL
• Click Save Changes
• Observe success message
• Navigate to Repository
• Observe a blank README.md has been added on branch master
• Navigate back to /settings/repository
• Observe mirroring failed with error message: "The repository failed to update X minutes ago. Branch already exists"
• Click Update Now
• Observe mirroring failed with error message: "The default branch (master) has diverged from its upstream counterpart and could not be updated automatically."

What is the current bug behavior?

Mirroring fails because i) a master branch is created, and ii) a blank README.md is added, causing master to diverge from upstream.

What is the expected correct behavior?

No branch or README should be created and mirroring should complete successfully.

Output of checks

This bug happens on GitLab.com

https://gitlab.com/gitlab-org/gitlab-ce/merge_requests/9009/diffs#f3120f4e2cca795b74236db41b1fc6d68a6f6a33

Links

Zendesk: https://gitlab.zendesk.com/agent/tickets/76661