Earlier quoted context omitted.
The key is the "Git-enabled `PS1`". PS1 is an environment variable recognised by common shell programs (such as bash) that configures the shell prompt. Git often installs its own glue into the prompt that ends up running a Git executable to discover such things as the current branch name and how many changed files. The vulnerability is that it's possible to add malicious things to .git/config that the git executable…
Damn. So the script I use to put the branch name in my prompt is bad? Could I solve this by making .git/config readonly for non sudo?
If you think things are locked down strongly enough with sudo and never install anything that might add root files you don't expect you are most likely safe.
This release also adds an environment variable you can set that makes certain that git has a "ceiling" that it never crosses when checking for .git/config files. The idea being that you'd never want git to look above `/user/*/` for instance, as you'd never expect to have a "machine-wide" git config.