I cite the git documentation:
This option is only used by Mac OS implementation of Git. When core.precomposeUnicode=true, Git reverts the unicode decomposition of filenames done by Mac OS. This is useful when sharing a repository between Mac OS and Linux or Windows. (Git for Windows 1.7.10 or higher is needed, or Git under cygwin 1.7). When false, file names are handled fully transparent by Git, which is backward compatible with older versions of Git
Is there anything in the full path to the repo that may have Unicode chars? Otherwise, use strace or similar on the git status command and examine the output of that.