Why does git diff on Windows warn that the "terminal is not fully functional"?

If you are having issues in cmd.exe, for instance, see the warning here:

Then simply set your environment variables and include TERM=msys. After that, each time you open a cmd.exe, your variable will be set correctly.

NOW YOU MUST RESTART YOUR SHELL (CMD.EXE). Just run a new one. And from there, you should have no more issues. Again:

For Git Bash, this can be fixed by adding the following line to ~/.bashrc:

export TERM=cygwin

-or-

export TERM=msys

The first seems to be the original by git for windows, the second a popular known form to "heal" as well.

The problem can be caused if some other program (like for example Strawberry Perl) sets the TERM system environment variables.

http://code.google.com/p/msysgit/issues/detail?id=184

Above answers was not fully worked for me, so I did:Add

export TERM=msys 

to "[githome]/etc/profile" at the top but it made changes only for git bash. Then I added

@set TERM=msys

to "[githome]/cmd/git.cmd" after @setlocal (I installed only git run from command line). May be this decision not truly good but it works for me and there are not any terminal warnings. (I use git version 1.7.10.msysgit.1).