Most of the options here are self-explanatory, but a few points need clarifying.
Backup original file renames the original file in the WC to
filename.bak before saving the modified version.
Default to UTF-8 encoding when set, ANSI files are loaded as UTF-8 encoded and saved as such when edited.
Use ribbons when set, ribbons interface is used (looks like Office 2007). When unset, traditional toolbar interface is used. Default is set.
Use spaces when set, pressing tab key inserts spaces. Default is unset (tab char is used).
Smart tab char when set, pressing tab key inserts tab/spaces based on adjacent lines/characters. Default is unset.
EditorConfig when set, it will detect
.editorconfig files. Currently, it supports indent_style(space/tab) and indent_size properties. See EditorConfig website for more details.
Max line length for inline diffs TortoiseGitMerge can get slow when showing inline diffs for very long lines. Because of that only lines that are shorter than 3000 chars are shown with inline diffs. You can change this value here.
Ignore line endings hides changes which are due solely to difference in line-end style.
Ignore case changes hides changes which are due solely to case changes within the text. This can be useful with apps such as Visual Basic, which changes case in variables without warning.
Context lines for patches specifies how many context lines for patch files generated from TortoiseGitMerge. The default value is -1, which means context lines number is controlled by git or
This dialog allows you to select the background color coding used to highlight the different line changes.