If you know you have not intentionally / manually changed any files locally, you should be fine to choose ‘y’ to continue. (Sometimes when a package is updated, the files may have changed permissions or get moved around in the source, making the old installed version look like it was modified according to git, even though it was not.) For upgrades, unless you’re manually making changes locally, you will essentially always need to choose “yes” on these prompts.
Once you allow composer update to finish, the git operations should complete without aborting.