Strange installation problem with nRF Connect SDK - git not found

Question

I am facing yet another strange installation problem, after nRF Connect SDK always fails with error "not found" has been solved. 
 The installation worked so far and I was able to use the nRF Connect SDK without any issues. 
 
 When I yesterday tried to use the setup again, I suddenly got errors like "No boards found" etc. I read up on this forum about potential issues and reinstalled the SDKs and so on. Nothing helped. I noticed that everything worked fine if I tried to build on the commandline using "west builld" in VS Code, but the UI functions did not work. 
 Then I tried uninstalling everything, reinstall the VS Code extensions and all of a sudden I was no longer able to install the SDK anymore given me errors like "git not found" while GIT is DEFINITELY PRESENT on the system, also in the default search path. Running git from a cmdline works fine. 
 
 So I even reinstalled GIT with the Windows installer, rebooted etc, but nothing seemed to make this problem go away. 
 Then I tried installing the stuff using VS Code again, but where presented the same problem

If I open a new nRF Connect terminal and issue the very same command "west init" manually there, it works:

But after the installation the extension still complains nothing is installed. 
 [19:08:47] nRF Command Line Tools 10.23.2 are up to date
[19:08:58] nrfutil-toolchain-manager install v2.5.0: Download toolchain
[19:09:00] nrfutil-toolchain-manager install v2.5.0: Finished, using previously downloaded file: success
[19:09:00] nrfutil-toolchain-manager install v2.5.0: Unpack toolchain
[19:09:28] nrfutil-toolchain-manager install v2.5.0: Toolchain unpacked to C:
cs	mp\.tmpjhd3yt: success
[19:09:28] nrfutil-toolchain-manager install v2.5.0: Install toolchain
[19:09:28] nrfutil-toolchain-manager install v2.5.0: Toolchain installed at C:
cs	oolchains\c57af46cb7: success
[19:09:29] =========== Toolchain validation report for nRF Connect SDK Toolchain v2.5.0 ===========
No issues were detected with the toolchain.
[19:09:53] Command failed: west init -m https://github.com/nrfconnect/sdk-nrf --mr v2.5.1
FATAL ERROR: can't find git; install it or ensure it's on your PATH

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 "electron": "25.9.7",
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 "system": {
 "date": "2023-12-26T18:11:31.932Z",
 "vscodeRoot": "c:\Users\daubsi\AppData\Local\Programs\Microsoft VS Code\resources\app",
 "nrfConnectForDesktopInstalled": true,
 "vscodeUptime": "00:02:53",
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 "version": "2.5.0",
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 "tools": {
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 "nrfutil": "Not found",
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 "environment": {
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 "HOME": "C:\Users\daubsi",
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 "HOMEPATH": "\Users\daubsi",
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 "ZEPHYR_TOOLCHAIN_VARIANT": "zephyr",
 "ZEPHYR_SDK_INSTALL_DIR": "C:\ncs\toolchains\c57af46cb7\opt\zephyr-sdk",
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 "HOME": "C:\Users\daubsi",
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 "Path": "C:\Program Files (x86)\VMware\VMware Workstation\bin\;C:\Python310\Scripts\;C:\Python310\;C:\WINDOWS\system32;C:\WINDOWS;C:\WINDOWS\System32\Wbem;C:\WINDOWS\System32\WindowsPowerShell\v1.0\;C:\WINDOWS\System32\OpenSSH\;C:\Program Files\PuTTY\;C:\Program Files (x86)\Pico Technology\PicoScope6\;C:\Program Files\010 Editor;C:\Program Files (x86)\GitExtensions\;C:\Program Files\dotnet\;C:\Program Files\Nordic Semiconductor\nrf-command-line-tools\bin\;C:\Program Files\Git\cmd;C:\Users\daubsi\.cargo\bin;C:\Python310\Scripts\;C:\Python310\;C:\Users\daubsi\AppData\Local\Microsoft\WindowsApps;C:\Users\daubsi\AppData\Local\Programs\Microsoft VS Code\bin;C:\Program Files (x86)\Nmap;C:\Users\daubsi\vod_download_tools;",
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 "config": {
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 "toolchain": {
 "path": "${nrf-connect.toolchain:2.5.0}"
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 "ozonePath": "",
 "applications": [],
 "applicationOptions": {},
 "kconfig": {
 "interface": "kconfig"
 },
 "west": {
 "env": {
 "$base": "terminal"
 }
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 "boardRoots": [],
 "taskBindings": {},
 "debugging": {
 "flash": true,
 "bindings": {},
 "justMyCode": true
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 "recover": false
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 "isActive": true
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}

What could be the reason for this? 
 Refering to my other post mentioned at the top: I made sure that tools like "reg.exe", "git.exe" etc. fully resolve without issued.