Re: GVFS sounds super dumb
I can think of several possible points:
1) If your git repository is 300GB (perhaps because you have several decades of spaghetti dependencies in there) then you don't want to pull it all in at once. The usual DVCS approach of "grab the repo and party on dude" doesn't scale. (Yes I've heard of re-factoring and technical debt. Apparently, despite re-writing Windows from the ground up with every major release, MS haven't.)
2) If your toolchain doesn't support git, you need to make it look more like a normal part of the file system, because everyone supports "normal files". So MS have written a filesystem driver that does that. (According to the blog, they intend to ditch this approach in the longer term, in favour of building git support into NTFS. What ... the ... fsck! Can you spell "retrograde"?)
3) Having done 1 and 2, your next problem is that you don't have all the files locally and still need wire access to the originals, so some kind of proxy might be nice.
I can see that purists might reckon that all this is solving the wrong problem, but if the Right solution is quickly re-factor 300GB of source code then I can also see that MS might be forgiven for pursuing this approach. When you are up to your nose in shit, opening your mouth to call for help isn't necessarily the thing you do first.