It currently can't, which is why this test is needed. The situation
has recently taken a turn for the worse, since git-gc nowadays packs
refs by default.
--- /dev/null
+#!/bin/sh
+#
+# Copyright (c) 2007 Karl Hasselström
+#
+
+test_description='Test that StGIT can handle packed refs'
+
+. ./test-lib.sh
+stg init
+
+test_expect_success \
+ 'Pack refs and make sure that we can still see them' '
+ stg branch -c foo &&
+ [ $(stg branch -l | tee /dev/stderr | wc -l) -eq 2 ] &&
+ git pack-refs --all &&
+ [ $(stg branch -l | tee /dev/stderr | wc -l) -eq 2 ]
+'
+
+test_expect_success \
+ 'Try to delete a branch whose ref has been packed' '
+ stg branch -d master
+'
+
+test_done