diff --git a/crates/aura-cli/src/scaffold.rs b/crates/aura-cli/src/scaffold.rs
index 9cd75c9..0c4a0b1 100644
--- a/crates/aura-cli/src/scaffold.rs
+++ b/crates/aura-cli/src/scaffold.rs
@@ -239,6 +239,12 @@ pub fn scaffold(spec: &ScaffoldSpec) -> Result<(), String> {
     write("blueprints/signal.json", render(SIGNAL_JSON, spec))?;
     write("CLAUDE.md", render(CLAUDE_MD, spec))?;
     // Best-effort git init: a warning, never an error (cargo-new mirror).
+    // Also the cargo-new mirror: inside an existing work tree the init is
+    // SKIPPED silently — a nested .git is a gitlink/submodule hazard when the
+    // scaffold lands in a tracked tree (#204).
+    if inside_git_work_tree(&spec.target_dir) {
+        return Ok(());
+    }
     match std::process::Command::new("git")
         .arg("init")
         .current_dir(&spec.target_dir)
@@ -250,6 +256,18 @@ pub fn scaffold(spec: &ScaffoldSpec) -> Result<(), String> {
     Ok(())
 }
 
+/// Whether `dir` already sits inside a git work tree (`git rev-parse`, the
+/// same oracle cargo-new consults). A missing git binary or any failure reads
+/// as "not in a work tree" — the init stays best-effort either way.
+fn inside_git_work_tree(dir: &std::path::Path) -> bool {
+    std::process::Command::new("git")
+        .args(["rev-parse", "--is-inside-work-tree"])
+        .current_dir(dir)
+        .output()
+        .map(|o| o.status.success() && String::from_utf8_lossy(&o.stdout).trim() == "true")
+        .unwrap_or(false)
+}
+
 #[cfg(test)]
 mod tests {
     use super::*;
diff --git a/crates/aura-cli/tests/project_new.rs b/crates/aura-cli/tests/project_new.rs
index 1ea0fcd..c91fde2 100644
--- a/crates/aura-cli/tests/project_new.rs
+++ b/crates/aura-cli/tests/project_new.rs
@@ -141,6 +141,72 @@ fn new_namespace_override_reaches_the_built_vocabulary() {
     let _ = std::fs::remove_dir_all(&base);
 }
 
+/// Property: `aura new` mirrors `cargo new` — when the target directory is
+/// already inside a git work tree, the scaffolder does NOT initialize a
+/// nested repo. A nested `.git` under a tracked tree is a gitlink/submodule
+/// hazard (it bit the 0107 fieldtest corpus); the enclosing repo owns the
+/// scaffold's history.
+#[test]
+fn new_inside_a_work_tree_skips_the_nested_git() {
+    let base = tmp("insidegit");
+    let init = Command::new("git")
+        .arg("init")
+        .current_dir(&base)
+        .output()
+        .expect("git init the enclosing work tree");
+    assert!(
+        init.status.success(),
+        "git init base failed: {}",
+        String::from_utf8_lossy(&init.stderr)
+    );
+
+    let out = aura(&["new", "demo-lab"], &base);
+    assert!(
+        out.status.success(),
+        "aura new failed: {}",
+        String::from_utf8_lossy(&out.stderr)
+    );
+    let proj = base.join("demo-lab");
+    // The full scaffold still lands unchanged...
+    for f in [
+        "Cargo.toml",
+        "Aura.toml",
+        ".gitignore",
+        "src/lib.rs",
+        "blueprints/signal.json",
+        "CLAUDE.md",
+    ] {
+        assert!(proj.join(f).is_file(), "missing scaffolded file {f}");
+    }
+    // ...but without a nested repo of its own.
+    assert!(
+        !proj.join(".git").exists(),
+        "scaffold nested a .git inside an existing work tree (gitlink hazard)"
+    );
+    let _ = std::fs::remove_dir_all(&base);
+}
+
+/// Guard against over-removal of the git-init: OUTSIDE any work tree the
+/// scaffold still initializes its own repo. `std::env::temp_dir()` is not
+/// inside a git work tree (the e2e helpers here already rely on that), so the
+/// scaffold's parent is genuinely detached from this checkout's tree.
+#[test]
+fn new_outside_a_work_tree_initializes_git() {
+    let base = tmp("outsidegit");
+    let out = aura(&["new", "demo-lab"], &base);
+    assert!(
+        out.status.success(),
+        "aura new failed: {}",
+        String::from_utf8_lossy(&out.stderr)
+    );
+    let proj = base.join("demo-lab");
+    assert!(
+        proj.join(".git").is_dir(),
+        "scaffold outside a work tree must initialize its own repo"
+    );
+    let _ = std::fs::remove_dir_all(&base);
+}
+
 #[test]
 fn new_works_inside_an_unbuilt_project_tree() {
     // Scaffold once (unbuilt), then scaffold AGAIN from inside that tree: