Need your help with MinGW Issue 17: --color options don't work (produce garbage)

Here are the facts:

'git branch --color' produces garbage:
$ git branch --color
  devel←[m
  dima←[m
  dmitryk←[m
* ←[32mmaster←[m
  mob←[m
  next←[m

'git branch --color | cat' produces expected colored output.

I've traced it down to printf statement in gdb and it sends the right esc-sequence. Where should I look next?

(little bit) more info here: http://code.google.com/p/msysgit/issues/detail?id=17