How do I troubleshoot bbdiff not being used as my git difftool (on macOS)?

After reading through Configuring diff tool with .gitconfig, I setup my ~/.gitconfig to contain the following:

[diff]
    tool = bbdiff
[difftool "bbdiff"]
    cmd = /usr/local/bin/bbdiff --wait --resume "$LOCAL" "$REMOTE"

But when I run git difftool or git difftool somefile.ext, I just get the diff dumped to stdout (in color). How do I figure out why bbdiff isn't being invoked?

Note I'm using macOS 10.15.6 with its default zsh and git version 2.28.0.

Update: (with answers to questions in the comments)

responding to zrzka's second comment:

✗ git config -l | fgrep diff
diff.tool=bbdiff
difftool.bbdiff.cmd=/usr/local/bin/bbdiff --wait --resume $LOCAL $REMOTE

responding to zrzka's third comment:

✗ git difftool --tool-help
'git difftool --tool=<tool>' may be set to one of the following:
        opendiff
        vimdiff
        vimdiff2
        vimdiff3

    user-defined:
        bbdiff.cmd /usr/local/bin/bbdiff --wait --resume $LOCAL $REMOTE

The following tools are valid, but not currently available:
        araxis
        ...

Update #2:

Just in case it's related, I don't know why all git commands I run in iTerm (or Terminal) are piped through less. git branch and git diff both stop after one page and h brings up "SUMMARY OF LESS COMMANDS". But git difftool is not piped through less.

Update #3:

As suggested by zrzka's comment, I created /usr/local/bin/foo:

✗ cat /usr/local/bin/foo
#!/usr/bin/env bash
echo "Foo $@"
✗ ll /usr/local/bin/foo
-rwxr-xr-x  1 dspitzer  admin    34B Aug 13 13:09 /usr/local/bin/foo

And I configured it in my .gitconfig:

✗ cat ~/.gitconfig
[user]
    name = Daryl Spitzer
    email = dspitzer@xxx.xxx
[pager]
    diff = false
[diff]
    tool = foo
[difftool]
    prompt = false
[difftool "foo"]
    cmd = /usr/local/bin/foo "$LOCAL" "$REMOTE"

But git difftool just outputs to stdout.

Q: Does git have a log somewhere?