When I use git, I usually change between branches and my iOSBaseSDK.xcworkspace file is modified.
When this happen my Xcode shows the following alert:

The file "YourProject.xcworkspace" has been modified by another application
The file is located at "LOCATION". Do you want to keep the Xcode version, or use the version on disk?
Keep Xcode Version Use Version on Disk
I don't understand the meaning of the two options, as they relate to the git branches I am switching between.
What is the difference between Keep Xcode Version and Use Version on Disk?
Let's have this assumption , suppose you have a file inside your xcode project and out of xcode you edited it without hitting save , then inside xcode you tried to edit that same file , then you'll get that message
Xcode version : the one you currently editing
Disk version : the stored version on disk
git changes the local files automatically and when the change is wide xcode shows that message , so after a git pull click Use version on disk
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