OK I was able to find 100% repro steps out of sources on master. I can't repro on Insiders tho... 🙈

There's a bit of setup:

git init foo
git init bar
echo hello > foo/file.json

1. Then, open both folders in a single workspace window
2. Go to the SCM viewlet, file.json should appear as untracked with the letter U
3. Click file.json and it will open a diff editor, now in the SCM view it appears as 1,U due to the JSON syntax error
4. Reload

🐛 It only shows 1 instead of U. As soon as you hit Refresh on the repository, the U appears!

This could also very well be an issue in Git and not decorations. @jrieken Can you check whether the decorations are reaching your model at least?