This question is based on VonC's comment at the thread.
Is Git's auto-detection for difftool or mergetool scripted or is it within some Git executable?
It's scripted in git-mergetool. I found this at line 344 of my copy.
if test -z "$merge_tool"; then
merge_tool=`git config merge.tool`
if test -n "$merge_tool" && ! valid_tool "$merge_tool"; then
echo >&2 "git config option merge.tool set to unknown tool: $merge_tool"
echo >&2 "Resetting to default..."
unset merge_tool
fi
fi
if test -z "$merge_tool" ; then
if test -n "$DISPLAY"; then
merge_tool_candidates="kdiff3 tkdiff xxdiff meld gvimdiff"
if test -n "$GNOME_DESKTOP_SESSION_ID" ; then
merge_tool_candidates="meld $merge_tool_candidates"
fi
if test "$KDE_FULL_SESSION" = "true"; then
merge_tool_candidates="kdiff3 $merge_tool_candidates"
fi
fi
if echo "${VISUAL:-$EDITOR}" | grep 'emacs' > /dev/null 2>&1; then
merge_tool_candidates="$merge_tool_candidates emerge"
fi
(snip)