I was the external contractor brought onto the project as the project's macOS kernel extension expert; my contract expired in November after the port was put on ice. As far as I'm aware it's no longer being pursued, with sparse checkouts being the new hotness.
I don't want to and can't speak for Microsoft, and I did not make the final decision, but:
* The user space alternatives (NSFileProvider, EndpointSecurity) are not up to the job for various reasons.
* Porting everything to the much more involved VFS KPI would have been a large amount of work, and with a near-100% risk of having the rug pulled out under it yet again.
VFSForGit is/was not a true file system, it just intercepts file I/O events to dummy files to lazily fill them with content and to log writes so that 'git status' does not have to scan the whole repo for changes.
The macOS port uses the KAUTH listener API, which was indeed deprecated with 10.15.
Whoops, my mistake. (In my defense, it has VFS in the name! So I just assumed it uses xnu's VFS API, but apparently the name comes from the Windows VFS API.)
It sounds like FileProvider would be perfectly suited to the job if it weren't pulled.
Someone else on the project experimented with FileProvider during the Catalina beta, so this is all second hand, but it wasn't really suitable for the job - it seemed more designed for having a special folder like the iCloud Drive, and didn't work well with CLI tools. I actually didn't realise it was pulled before the Catalina launch, but that makes sense, I got the impression it was nowhere near production ready.
