Yes it does. Don’t go working away, for instance, putting you /etc
directory in git and then switching branches.
Git may change your directories to 755
and your files to 644
which will cause the system problems with security, and may even prevent booting.
look at etckeeper or this tutorial for more information about keeping /etc
in a git repo, but the answer to “Does Git change file permissions?” is a definitive “Yes”