In Windows Terminal click on the arraw down button and click Settings (alternatively, press Ctrl+Shift+,). This will open the settings.json file. Then add "startingDirectory": "" to the GitBash profile. This should change the default directory to where you opened the terminal.
It should be like this:
{
    "guid": "{e9961a24-1111-2222-3333-835a2d22397d}",
    "hidden": false,
    "name": "Git Bash",
    "icon" : "%PROGRAMFILES%\\git\\mingw64\\share\\git\\git-for-windows.ico",
    "commandline": "%PROGRAMFILES%\\Git\\bin\\bash.exe -l -i",
    "historySize" : 9001,
    "padding" : "0, 0, 0, 0",
    "snapOnInput" : true,
    "useAcrylic" : true,
    "startingDirectory": "~",
    "acrylicOpacity": 0.9          
}
Notes:
- "startingDirectory": "~"in this config makes Git Bash start in the user profile directory.
- You can replace e9961a24-1111-2222-3333-835a2d22397dwith any other unique UUID.