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

Question

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

CMD.EXE without the TERM set correctly

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.

How to set your TERM environment variable

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

CMD.EXE with the correct TERM set