CONFLICT (submodule): Merge conflict in 'xyz'

CONFLICT (submodule): Merge conflict in orthrus/external

[dev@baobab vf]$ git checkout -b KRAK-1541-cleanup
vfcore/orthrus/external: needs merge
vfcore/vfcommonlib: needs merge
error: you need to resolve your current index first

[dev@baobab vf]$ git status
# On branch master
# Your branch is ahead of 'origin/master' by 98 commits.
#
# Unmerged paths:
# (use "git reset HEAD <file>..." to unstage)
# (use "git add/rm <file>..." as appropriate to mark resolution)
#
# both modified: orthrus/external
#

Bad Solution

With git reset HEAD <submodule-path> it resolves the conflict and then creating a new branch passes.

[dev@baobab vf]$ git reset HEAD orthrus/external
[dev@baobab vf]$ git checkout -b KRAK-1541-cleanup
M orthrus/external
Switched to a new branch 'KRAK-1541-cleanup'

This leaves some modifications in the submodule and is not a suitable solution.