nvim in macOS Terminal breaks on displaying termguicolors

Question

I have been using Neovim in iTerm2 so far and it displays my Vim syntax just fine. I started to use the good ol' Mac OS Terminal and it cannot display my Vim syntax colors after using set termguicolors.

On the left side I have iTerm and on the right side is the OSX Terminal with the standard nvim highlighting.

After turning on termguicolors it looks like this: (iTerm works as expected and OSX Terminal presents a gray mess)

I would like to understand why this happens.

Answer 1

Terminal.app only supports 256 colors, which is not the 24-bit color that truecolors uses.