diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/ArtifactFunctionTestCase.java b/src/test/java/com/google/devtools/build/lib/skyframe/ArtifactFunctionTestCase.java
index 79e4013..cd017be 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/ArtifactFunctionTestCase.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/ArtifactFunctionTestCase.java
@@ -21,6 +21,7 @@
 import com.google.devtools.build.lib.analysis.BlazeDirectories;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
 import com.google.devtools.build.lib.skyframe.ActionLookupValue.ActionLookupKey;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.TestConstants;
 import com.google.devtools.build.lib.testutil.TestRuleClassProvider;
@@ -73,7 +74,9 @@
     BlazeDirectories directories = new BlazeDirectories(root, root, root,
         TestConstants.PRODUCT_NAME);
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, directories);
+        pkgLocator,
+        ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS,
+        directories);
     differencer = new RecordingDifferencer();
     evaluator =
         new InMemoryMemoizingEvaluator(
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/ContainingPackageLookupFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/ContainingPackageLookupFunctionTest.java
index 6c42579..ea1fc81 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/ContainingPackageLookupFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/ContainingPackageLookupFunctionTest.java
@@ -24,6 +24,7 @@
 import com.google.devtools.build.lib.cmdline.PackageIdentifier;
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.FoundationTestCase;
 import com.google.devtools.build.lib.testutil.TestConstants;
@@ -61,8 +62,10 @@
         new AtomicReference<>(new PathPackageLocator(outputBase, ImmutableList.of(rootDirectory)));
     deletedPackages = new AtomicReference<>(ImmutableSet.<PackageIdentifier>of());
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, new BlazeDirectories(rootDirectory, rootDirectory, rootDirectory,
-            TestConstants.PRODUCT_NAME));
+        pkgLocator,
+        ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS,
+        new BlazeDirectories(
+            rootDirectory, rootDirectory, rootDirectory, TestConstants.PRODUCT_NAME));
 
     Map<SkyFunctionName, SkyFunction> skyFunctions = new HashMap<>();
     skyFunctions.put(
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/FileFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/FileFunctionTest.java
index 6308953..131dbbb 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/FileFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/FileFunctionTest.java
@@ -40,6 +40,7 @@
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.events.StoredEventHandler;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.ManualClock;
 import com.google.devtools.build.lib.testutil.TestConstants;
@@ -113,15 +114,15 @@
   }
 
   private SequentialBuildDriver makeDriver() {
-    return makeDriver(/*errorOnExternalFiles=*/ false);
+    return makeDriver(ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS);
   }
 
-  private SequentialBuildDriver makeDriver(boolean errorOnExternalFiles) {
+  private SequentialBuildDriver makeDriver(ExternalFileAction externalFileAction) {
     AtomicReference<PathPackageLocator> pkgLocatorRef = new AtomicReference<>(pkgLocator);
     BlazeDirectories directories =
         new BlazeDirectories(pkgRoot, outputBase, pkgRoot, TestConstants.PRODUCT_NAME);
     ExternalFilesHelper externalFilesHelper =
-        new ExternalFilesHelper(pkgLocatorRef, errorOnExternalFiles, directories);
+        new ExternalFilesHelper(pkgLocatorRef, externalFileAction, directories);
     differencer = new RecordingDifferencer();
     MemoizingEvaluator evaluator =
         new InMemoryMemoizingEvaluator(
@@ -657,99 +658,76 @@
   }
 
   @Test
-  public void testFilesOutsideRootWhenExternalDisallowed() throws Exception {
+  public void testFilesOutsideRootWhenExternalAssumedNonExistentAndImmutable() throws Exception {
     file("/outsideroot");
 
-    SequentialBuildDriver driver = makeDriver(/*errorOnExternalFiles=*/ true);
+    SequentialBuildDriver driver =
+        makeDriver(ExternalFileAction.ASSUME_NON_EXISTENT_AND_IMMUTABLE_FOR_EXTERNAL_PATHS);
     SkyKey key = skyKey("/outsideroot");
     EvaluationResult<SkyValue> result =
         driver.evaluate(
             ImmutableList.of(key), false, DEFAULT_THREAD_COUNT, NullEventHandler.INSTANCE);
 
-    assertTrue(result.hasError());
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .isInstanceOf(FileOutsidePackageRootsException.class);
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .hasMessage("Encountered reference to external mutable [/]/[outsideroot]");
+    assertThatEvaluationResult(result).hasNoError();
+    FileValue value = (FileValue) result.get(key);
+    assertThat(value).isNotNull();
+    assertFalse(value.exists());
   }
 
   @Test
-  public void testAbsoluteSymlinksToFilesOutsideRootWhenExternalDisallowed() throws Exception {
+  public void testAbsoluteSymlinksToFilesOutsideRootWhenExternalAssumedNonExistentAndImmutable()
+      throws Exception {
     file("/outsideroot");
     symlink("a", "/outsideroot");
 
-    SequentialBuildDriver driver = makeDriver(/*errorOnExternalFiles=*/ true);
+    SequentialBuildDriver driver =
+        makeDriver(ExternalFileAction.ASSUME_NON_EXISTENT_AND_IMMUTABLE_FOR_EXTERNAL_PATHS);
     SkyKey key = skyKey("a");
     EvaluationResult<SkyValue> result =
         driver.evaluate(
             ImmutableList.of(key), false, DEFAULT_THREAD_COUNT, NullEventHandler.INSTANCE);
 
-    assertTrue(result.hasError());
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .isInstanceOf(SymlinkOutsidePackageRootsException.class);
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .hasMessage(
-            "Encountered symlink [/root]/[a] linking to external mutable [/]/[outsideroot]");
+    assertThatEvaluationResult(result).hasNoError();
+    FileValue value = (FileValue) result.get(key);
+    assertThat(value).isNotNull();
+    assertFalse(value.exists());
   }
 
-  /**
-   * A slightly more complicated negative test to ensure that the error message contains the real
-   * symlink and external path instead of the path of the top-level skyframe file node. In other
-   * words, the error is bubbled up to the top-level node, but the error message stops getting
-   * updated once it enters the internal path boundary.
-   */
   @Test
-  public void testAbsoluteSymlinksReferredByInternalFilesToFilesOutsideRootWhenExternalDisallowed()
+  public void testAbsoluteSymlinksReferredByInternalFilesToFilesOutsideRootWhenExternalAssumedNonExistentAndImmutable()
       throws Exception {
     file("/outsideroot/src/foo/bar");
     symlink("/root/src", "/outsideroot/src");
 
-    SequentialBuildDriver driver = makeDriver(/*errorOnExternalFiles=*/ true);
+    SequentialBuildDriver driver =
+        makeDriver(ExternalFileAction.ASSUME_NON_EXISTENT_AND_IMMUTABLE_FOR_EXTERNAL_PATHS);
     SkyKey key = skyKey("/root/src/foo/bar");
     EvaluationResult<SkyValue> result =
         driver.evaluate(
             ImmutableList.of(key), false, DEFAULT_THREAD_COUNT, NullEventHandler.INSTANCE);
 
-    assertTrue(result.hasError());
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .isInstanceOf(SymlinkOutsidePackageRootsException.class);
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .hasMessage(
-            "Encountered symlink [/root]/[src] linking to external mutable [/]/[outsideroot/src]");
+    assertThatEvaluationResult(result).hasNoError();
+    FileValue value = (FileValue) result.get(key);
+    assertThat(value).isNotNull();
+    assertFalse(value.exists());
   }
 
   @Test
-  public void testRelativeSymlinksToFilesOutsideRootWhenExternalDisallowed() throws Exception {
+  public void testRelativeSymlinksToFilesOutsideRootWhenExternalAssumedNonExistentAndImmutable()
+      throws Exception {
     file("../outsideroot");
     symlink("a", "../outsideroot");
-    SequentialBuildDriver driver = makeDriver(/*errorOnExternalFiles=*/ true);
+    SequentialBuildDriver driver = 
+        makeDriver(ExternalFileAction.ASSUME_NON_EXISTENT_AND_IMMUTABLE_FOR_EXTERNAL_PATHS);
     SkyKey key = skyKey("a");
     EvaluationResult<SkyValue> result =
         driver.evaluate(
             ImmutableList.of(key), false, DEFAULT_THREAD_COUNT, NullEventHandler.INSTANCE);
 
-    assertTrue(result.hasError());
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .isInstanceOf(SymlinkOutsidePackageRootsException.class);
-    assertThatEvaluationResult(result)
-        .hasErrorEntryForKeyThat(key)
-        .hasExceptionThat()
-        .hasMessage(
-            "Encountered symlink [/root]/[a] linking to external mutable [/]/[outsideroot]");
+    assertThatEvaluationResult(result).hasNoError();
+    FileValue value = (FileValue) result.get(key);
+    assertThat(value).isNotNull();
+    assertFalse(value.exists());
   }
 
   @Test
@@ -757,13 +735,18 @@
     Path file = file("insideroot");
     symlink("a", file.getPathString());
 
-    SequentialBuildDriver driver = makeDriver(/*allowExternalReferences=*/ false);
+    SequentialBuildDriver driver =
+        makeDriver(ExternalFileAction.ASSUME_NON_EXISTENT_AND_IMMUTABLE_FOR_EXTERNAL_PATHS);
     SkyKey key = skyKey("a");
     EvaluationResult<SkyValue> result =
         driver.evaluate(
             ImmutableList.of(key), false, DEFAULT_THREAD_COUNT, NullEventHandler.INSTANCE);
 
-    assertFalse(result.hasError());
+    assertThatEvaluationResult(result).hasNoError();
+    FileValue value = (FileValue) result.get(key);
+    assertThat(value).isNotNull();
+    assertTrue(value.exists());
+    assertThat(value.realRootedPath().getRelativePath().getPathString()).isEqualTo("insideroot");
   }
 
   @SuppressWarnings({"rawtypes", "unchecked"})
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/FilesetEntryFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/FilesetEntryFunctionTest.java
index e4b5bbe..3b66ae1 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/FilesetEntryFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/FilesetEntryFunctionTest.java
@@ -36,6 +36,7 @@
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.packages.FilesetEntry.SymlinkBehavior;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.FoundationTestCase;
 import com.google.devtools.build.lib.testutil.TestConstants;
@@ -83,8 +84,9 @@
     AtomicReference<ImmutableSet<PackageIdentifier>> deletedPackages =
         new AtomicReference<>(ImmutableSet.<PackageIdentifier>of());
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, new BlazeDirectories(outputBase, outputBase, rootDirectory,
-            TestConstants.PRODUCT_NAME));
+        pkgLocator,
+        ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS,
+        new BlazeDirectories(outputBase, outputBase, rootDirectory, TestConstants.PRODUCT_NAME));
 
     Map<SkyFunctionName, SkyFunction> skyFunctions = new HashMap<>();
 
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/FilesystemValueCheckerTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/FilesystemValueCheckerTest.java
index 1ec88f5..e4bf7f1 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/FilesystemValueCheckerTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/FilesystemValueCheckerTest.java
@@ -37,6 +37,7 @@
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
 import com.google.devtools.build.lib.skyframe.DirtinessCheckerUtils.BasicFilesystemDirtinessChecker;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.TestConstants;
 import com.google.devtools.build.lib.testutil.TestRuleClassProvider;
@@ -103,7 +104,7 @@
     BlazeDirectories directories = new BlazeDirectories(pkgRoot, pkgRoot, pkgRoot,
         TestConstants.PRODUCT_NAME);
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, directories);
+        pkgLocator, ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS, directories);
     skyFunctions.put(SkyFunctions.FILE_STATE, new FileStateFunction(
         new AtomicReference<TimestampGranularityMonitor>(), externalFilesHelper));
     skyFunctions.put(SkyFunctions.FILE, new FileFunction(pkgLocator));
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/GlobFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/GlobFunctionTest.java
index a00dd07..0209343 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/GlobFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/GlobFunctionTest.java
@@ -30,6 +30,7 @@
 import com.google.devtools.build.lib.cmdline.PackageIdentifier;
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.GlobValue.InvalidGlobPatternException;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.ManualClock;
@@ -123,7 +124,9 @@
     AtomicReference<ImmutableSet<PackageIdentifier>> deletedPackages =
         new AtomicReference<>(ImmutableSet.<PackageIdentifier>of());
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, new BlazeDirectories(root, root, root, TestConstants.PRODUCT_NAME));
+        pkgLocator,
+        ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS,
+        new BlazeDirectories(root, root, root, TestConstants.PRODUCT_NAME));
 
     Map<SkyFunctionName, SkyFunction> skyFunctions = new HashMap<>();
     skyFunctions.put(SkyFunctions.GLOB, new GlobFunction(alwaysUseDirListing()));
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/PackageLookupFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/PackageLookupFunctionTest.java
index c200c41..40bebb7 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/PackageLookupFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/PackageLookupFunctionTest.java
@@ -29,6 +29,7 @@
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.packages.RuleClassProvider;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.skyframe.PackageLookupValue.BuildFileName;
 import com.google.devtools.build.lib.skyframe.PackageLookupValue.ErrorReason;
@@ -75,7 +76,7 @@
         new BlazeDirectories(
             rootDirectory, outputBase, rootDirectory, analysisMock.getProductName());
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, directories);
+        pkgLocator, ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS, directories);
 
     Map<SkyFunctionName, SkyFunction> skyFunctions = new HashMap<>();
     skyFunctions.put(
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/RecursiveFilesystemTraversalFunctionTest.java b/src/test/java/com/google/devtools/build/lib/skyframe/RecursiveFilesystemTraversalFunctionTest.java
index 4bbad97..b769b6d 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/RecursiveFilesystemTraversalFunctionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/RecursiveFilesystemTraversalFunctionTest.java
@@ -35,6 +35,7 @@
 import com.google.devtools.build.lib.cmdline.PackageIdentifier;
 import com.google.devtools.build.lib.events.NullEventHandler;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.skyframe.RecursiveFilesystemTraversalValue.ResolvedFile;
 import com.google.devtools.build.lib.skyframe.RecursiveFilesystemTraversalValue.TraversalRequest;
@@ -89,7 +90,7 @@
         new BlazeDirectories(
             rootDirectory, outputBase, rootDirectory, analysisMock.getProductName());
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, directories);
+        pkgLocator, ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS, directories);
 
     ConfiguredRuleClassProvider ruleClassProvider = analysisMock.createRuleClassProvider();
     Map<SkyFunctionName, SkyFunction> skyFunctions = new HashMap<>();
diff --git a/src/test/java/com/google/devtools/build/lib/skyframe/TimestampBuilderTestCase.java b/src/test/java/com/google/devtools/build/lib/skyframe/TimestampBuilderTestCase.java
index c5d1022..18f0293 100644
--- a/src/test/java/com/google/devtools/build/lib/skyframe/TimestampBuilderTestCase.java
+++ b/src/test/java/com/google/devtools/build/lib/skyframe/TimestampBuilderTestCase.java
@@ -50,6 +50,7 @@
 import com.google.devtools.build.lib.events.StoredEventHandler;
 import com.google.devtools.build.lib.exec.SingleBuildFileCache;
 import com.google.devtools.build.lib.pkgcache.PathPackageLocator;
+import com.google.devtools.build.lib.skyframe.ExternalFilesHelper.ExternalFileAction;
 import com.google.devtools.build.lib.skyframe.PackageLookupFunction.CrossRepositoryLabelViolationStrategy;
 import com.google.devtools.build.lib.testutil.FoundationTestCase;
 import com.google.devtools.build.lib.testutil.TestConstants;
@@ -151,7 +152,9 @@
     BlazeDirectories directories = new BlazeDirectories(rootDirectory, outputBase, rootDirectory,
         TestConstants.PRODUCT_NAME);
     ExternalFilesHelper externalFilesHelper = new ExternalFilesHelper(
-        pkgLocator, false, directories);
+        pkgLocator,
+        ExternalFileAction.DEPEND_ON_EXTERNAL_PKG_FOR_EXTERNAL_REPO_PATHS,
+        directories);
     differencer = new RecordingDifferencer();
 
     ActionExecutionStatusReporter statusReporter =