Is there a way to disable the case-sensitive search if I use the “contents:” keyword in a search.
Also in the results its unclear what matched the search, highlighting the matches in the diff editor would be great.
Perhaps there is a setting for it, otherwise this would be a improvement request.
If you are referring to the Find in Files, then there is an option to toggle case sensitive searches (It’s an icon with Aa)
The Find in Files does outline the matched tokens. Perhaps a screenshot would help to understand your case ?
I guess you a referring to sublime text search feature, but I’m talking about the git client sublime merge.
Ah, derp. Sorry 
You can open an enhancement request over at Sublime Merge’s issue tracker https://github.com/sublimehq/sublime_merge if one doesn’t already exist.