Merge tool not opening - solution inside comments

When I have conflicts and try to launch merge tool, nothing happens.
I've tried (use) embedded git, but have tried also system git.
Have TortoiseGit (TortoiseGitMerge) installed and it's available in the cmd (PATH value is set).

The only way to get some result is setting system default, but that's not a solution, since the path i need to do merge has spaces and it seems that system default uses arguments in the old tortoisemerge format (from the product tortoisesvn).

Anyhow, not being able to run merge, not getting any errors, nor reasonable error messages is considered as a bug. Since merging is a critical feature, issue is typed as blocker.

Important: inside process explorer under sh.exe sometimes i got a message: error opening process

but most of the time i just see the command that's causing the freezing of the app: