How does git handle folder permission?

I'm using git version 1.5.6.3, and it seems git doesn't notice a folder's mode changes

#create a test repository with a folder with 777 mode
:~$ mkdir -p test/folder
:~$ touch test/folder/dummy.txt
:~$ cd test
:~/test$ chmod 777 folder/

#init git repository
:~/test$ git init
Initialized empty Git repository in ~/test/.git/
:~/test$ git add .
:~/test$ git commit -m 'commit a directory'
Created initial commit 9b6b21a: commit a directory
 0 files changed, 0 insertions(+), 0 deletions(-)
 create mode 100644 folder/dummy.txt

#change folder permission to 744
:~/test$ chmod 744 folder/
:~/test$ git status 
# On branch master
nothing to commit (working directory clean)

What does 04000 stand for?

:~/test$ git ls-tree HEAD folder
040000 tree 726c1d5f0155771348ea2daee6239791f1cd7731	folder

Is this normal behavior?

How can I track folder mode changes?

The only 'permissions' bit that git tracks is the executable bit for files, the rest of the mode bits describe what type of file system object the object in each git tree is. git supports files and symlinks (blobs), directories (trees) and the submodules (commits).

git is designed to help track source code across different machines. Permission bits depend on user and group mappings between machines. In distributed environments where these mappings don't exist, tracking permission bits usually ends up hindering things rather than helping anything.

If you need to track more file system attributes that what git tracks natively you could consider and extension tool such as [etckeeper][1].

[1]: http://kitenet.net/~joey/code/etckeeper/ "etckeeper"