Under Options > Git > Global Ignore List, the file specified is being renamed to gitignore_global.txt.txt. (That is, an additional .txt is being appended to the filename). This breaks the ignore list and every file in a repo is then considered as part of the working copy.

I've seen this happen twice on two different machines but have been unable to reproduce it on demand. In the first instance I was using embedded Git, the second system Git, so its not related to that.

It may be related to cloning a project from bitbucket, since that is the last thing I did before this happened.