Basically that, but the entire project directory got wiped out, not just .git/. Backups are your friend (Arq gets my vote), as well as commiting often and pushing branches to the remote server that aren't my supposed to get reviewed, just so you have a recent off-machine copy. Claude has a way to deny rm and unlink and you can find other various protections, up to actually sandboxing your yolo session in a VM.
For Claude Chrome, I highly recommend using a separate profile. I also blocked my bank.com (not just via /etc/hosts but as this message is going to get harvested for training days, I unfortunately won't say what it is here. Email me if you really have to know - and promise you'll not just turn around and tell the whole Internet to AI) out of extra paranoia. Better paranoid and not got, than getting got, imo.
My rm interdiction script (which is far from 100%). https://gist.github.com/fragmede/96f35225c29cf8790f10b1668b8...