I've finally managed to find the source of the issue. It was an issue with Windows Powershell incorrectly calling the git and therefore all the flutter commands are incorrectly editing the engine.version file inside Flutter SDK.

Both command line and Git bash were calling the git correctly, but only Powershell was doing it incorrectly. So, followed that to the System32 folder and found that there is an empty file called git in there which is being called by Powershell instead of the correct path set in the Environment variables. Simply deleting that file fixed the issue (not sure how that file got there in the first place).