Looks good. %(cmdlineargs) is passed to both log and diff commands,
so it looks like it is correct to forward it to diff-files.

Adding it only for GIT_DIFF_UNSTAGED_FILES and not for GIT_DIFF_STAGED_FILES
is a bit inconsistent but seems good enough since it doesn't matter for the
submodule issue.
This means that with --ignore-submodules, Enter in the status view no longer
does anything on staged submodules. We could sidestep that by not showing
staged submodules (by adding %(cmdlineargs) to GIT_DIFF_STAGED_FILES too).
That would allow to filter staged hunks with tig -I boilerplate etc.
Probably absolutely not important.

If the only changes in the worktree are unstaged submodules, tig --ignore-submodules
will still show the "Unstaged Changes" in the main view,
but it's empty. Something similar already happens with commands like
tig -I '' that filter away every single hunk via %(cmdlineargs).

@bentitmus can you test if there are more issues with submodules with this patch?

Looks good, the overall change is now fairly small which is a good sign. Don't forget to squash the commits before merging

Sorry about the delay - I was away. I've tested this and it seems to work as expected (the speed up is considerable (from around 12s to around 2s). Thanks! As you say, it doesn't show the submodule (staged or unstaged), but this is fine. Most likely I will deliberately stage it from the command line or run tig without --ignore-submodules in those cases which are rare.

Thanks for the feedback.