diff --git a/mercurial/cext/util.h b/mercurial/cext/util.h
--- a/mercurial/cext/util.h
+++ b/mercurial/cext/util.h
@@ -40,6 +40,8 @@
 static const int dirstate_flag_mode_exec_perm = 1 << 6;
 static const int dirstate_flag_mode_is_symlink = 1 << 7;
 static const int dirstate_flag_expected_state_is_modified = 1 << 8;
+static const int dirstate_flag_all_unknown_recorded = 1 << 9;
+static const int dirstate_flag_all_ignored_recorded = 1 << 10;
 
 extern PyTypeObject dirstateItemType;
 #define dirstate_tuple_check(op) (Py_TYPE(op) == &dirstateItemType)
diff --git a/mercurial/dirstateutils/v2.py b/mercurial/dirstateutils/v2.py
--- a/mercurial/dirstateutils/v2.py
+++ b/mercurial/dirstateutils/v2.py
@@ -81,6 +81,9 @@
     """parse <len> nodes from <data> starting at offset <start>
 
     This is used by parse_dirstate to recursively fill `map` and `copy_map`.
+
+    All directory specific information is ignored and do not need any
+    processing (HAS_DIRECTORY_MTIME, ALL_UNKNOWN_RECORDED, ALL_IGNORED_RECORDED)
     """
     for i in range(len):
         node_start = start + NODE_SIZE * i
diff --git a/mercurial/helptext/internals/dirstate-v2.txt b/mercurial/helptext/internals/dirstate-v2.txt
--- a/mercurial/helptext/internals/dirstate-v2.txt
+++ b/mercurial/helptext/internals/dirstate-v2.txt
@@ -384,6 +384,8 @@
     MODE_EXEC_PERM = 1 << 6
     MODE_IS_SYMLINK = 1 << 7
     EXPECTED_STATE_IS_MODIFIED = 1 << 8
+    ALL_UNKNOWN_RECORDED = 1 << 9
+    ALL_IGNORED_RECORDED = 1 << 10
 
   The meaning of each bit is described below.
 
@@ -530,3 +532,29 @@
     does not need to do the same again.
     It is valid to never set this bit,
     and consider expected metadata ambiguous if it is set.
+
+`ALL_UNKNOWN_RECORDED`
+    If set, all "unknown" children existing on disk (at the time of the last
+    status) have been recorded and the `mtime` associated with
+    `HAS_DIRECTORY_MTIME` can be used for optimization even when "unknown" file
+    are listed.
+
+    Note that the amount recorded "unknown" children can still be zero if None
+    where present.
+
+    Also note that having this flag unset does not imply that no "unknown"
+    children have been recorded. Some might be present, but there is no garantee
+    that is will be all of them.
+
+`ALL_IGNORED_RECORDED`
+    If set, all "ignored" children existing on disk (at the time of the last
+    status) have been recorded and the `mtime` associated with
+    `HAS_DIRECTORY_MTIME` can be used for optimization even when "ignored" file
+    are listed.
+
+    Note that the amount recorded "ignored" children can still be zero if None
+    where present.
+
+    Also note that having this flag unset does not imply that no "ignored"
+    children have been recorded. Some might be present, but there is no garantee
+    that is will be all of them.
diff --git a/mercurial/pure/parsers.py b/mercurial/pure/parsers.py
--- a/mercurial/pure/parsers.py
+++ b/mercurial/pure/parsers.py
@@ -54,6 +54,8 @@
 DIRSTATE_V2_MODE_EXEC_PERM = 1 << 6
 DIRSTATE_V2_MODE_IS_SYMLINK = 1 << 7
 DIRSTATE_V2_EXPECTED_STATE_IS_MODIFIED = 1 << 8
+DIRSTATE_V2_ALL_UNKNOWN_RECORDED = 1 << 9
+DIRSTATE_V2_ALL_IGNORED_RECORDED = 1 << 10
 
 
 @attr.s(slots=True, init=False)
@@ -340,6 +342,9 @@
                 flags |= DIRSTATE_V2_MODE_IS_SYMLINK
         if self._mtime is not None:
             flags |= DIRSTATE_V2_HAS_FILE_MTIME
+        # Note: we do not need to do anything regarding
+        # DIRSTATE_V2_ALL_UNKNOWN_RECORDED and DIRSTATE_V2_ALL_IGNORED_RECORDED
+        # since we never set _DIRSTATE_V2_HAS_DIRCTORY_MTIME
         return (flags, self._size or 0, self._mtime or 0)
 
     def v1_state(self):
diff --git a/rust/hg-core/src/dirstate_tree/on_disk.rs b/rust/hg-core/src/dirstate_tree/on_disk.rs
--- a/rust/hg-core/src/dirstate_tree/on_disk.rs
+++ b/rust/hg-core/src/dirstate_tree/on_disk.rs
@@ -111,6 +111,8 @@
         const MODE_EXEC_PERM = 1 << 6;
         const MODE_IS_SYMLINK = 1 << 7;
         const EXPECTED_STATE_IS_MODIFIED = 1 << 8;
+        const ALL_UNKNOWN_RECORDED = 1 << 9;
+        const ALL_IGNORED_RECORDED = 1 << 10;
     }
 }
 
@@ -322,7 +324,11 @@
     pub(super) fn cached_directory_mtime(
         &self,
     ) -> Result<Option<TruncatedTimestamp>, DirstateV2ParseError> {
-        if self.flags().contains(Flags::HAS_DIRECTORY_MTIME) {
+        // For now we do not have code to handle ALL_UNKNOWN_RECORDED, so we
+        // ignore the mtime if the flag is set.
+        if self.flags().contains(Flags::HAS_DIRECTORY_MTIME)
+            && self.flags().contains(Flags::ALL_UNKNOWN_RECORDED)
+        {
             if self.flags().contains(Flags::HAS_FILE_MTIME) {
                 Err(DirstateV2ParseError)
             } else {
@@ -589,7 +595,18 @@
                             Node::from_dirstate_entry(entry)
                         }
                         dirstate_map::NodeData::CachedDirectory { mtime } => (
-                            Flags::HAS_DIRECTORY_MTIME,
+                            // we currently never set a mtime if unknown file
+                            // are present.
+                            // So if we have a mtime for a directory, we know
+                            // they are no unknown
+                            // files and we
+                            // blindly set ALL_UNKNOWN_RECORDED.
+                            //
+                            // We never set ALL_IGNORED_RECORDED since we
+                            // don't track that case
+                            // currently.
+                            Flags::HAS_DIRECTORY_MTIME
+                                | Flags::ALL_UNKNOWN_RECORDED,
                             0.into(),
                             (*mtime).into(),
                         ),