The mentioned git-in-git problem always annoyed me, at least it should be possible to store .git/ subtrees anywhere else but on the toplevel. Then git can scream at me for not using submodules, and I can then silence that warning because I obviously know what I am doing!

legit might be an esoteric use case for that, but storing raw testdata for git hooks (not a zip or the commands to create the repo) are actual usecases.