That's a hack. It's a login shell that, once you have already logged in and run the shell, prints a message saying you can't log in or run a shell, and then exits.

It does not stop you from, say, logging in to SSH and then starting a port forward. Or running a command in a way that bypasses the login shell. ssh will always pass it to your login shell but other ways can be vulnerable.

git-shell is actually made for this exact situation. it does allow uploading git repos I think so you can't open it to the public, maybe there's a way to configure it though to not allow that.