I am running Mac OS 10.11.6 with Xcode 7.3.1 and the associated command line tools. I just tried 'brew upgrade' and I get a "error" that my 7.3.1 is outdated and should be updated to Xcode 8.0, which is odd since 'brew update' works fine, and odder still that 'brew doctor' only considers an outdated Xcode to be just a warning.
Unfortunately, moving entirely to Xcode 8 is not an option, as Xcode 8 has fully deprecated the UI Automation instrument I use to write mobile automation tests. I have tried reinstalling homebrew from scratch, but get the same error. I have tried installing Xcode 8 and if I fiddle with 'xcode-select' every time I want to switch between updating brew and doing my day-to-day work, I can get by.
Why require Xcode 8?