I only diff the changed files. Producing blob out of BASON AST is trivial (one scan). Things may get slow for larger files, e.g. tree-sitter C++ parser is 25MB C file, 750KLoC. Takes couple seconds to import it. But it never changes, so no biggie.
There is room for improvement, but that is not a show-stopper so far. I plan round-tripping Linux kernel with full history, must show all the bottlenecks.
P.S. I checked lix. It uses a SQL database. That solves some things, but also creates an impedance mismatch. Must be x10 slow down at least. I use key-value and a custom binary format, so it works nice. Can go one level deeper still, use a custom storage engine, it will be even faster. Git is all custom.