> If that's how it works, that is massively stupid and can be fixed without forcing SHA-256 as a git hash.

I don't think it's massively stupid. Unless you want to re-hash the entire Merkle tree structure to sign your commit, you basically have to trust the hashes in the Merkle tree (or have a separate parallel Merkle tree) at some point in what you sign, which means you do have to trust the SHA-1 hashes. Otherwise even with a cryptographic signature you can always spoof at least the git repo history (e.g. even if you try to directly hash the entire contents of the current commit).

Re-hashing the entire Merkle tree structure seems prohibitively expensive to generate (even with a lot of caching) and pretty complicated for e.g. verifying a signature. Or you can do that incrementally, but then you're just generating a whole new parallel Merkle tree structure.

Regardless, at the end of the day, you need to trust the integrity of the Merkle tree structure. And you can either do that by trusting the hashes of the current Merkle tree, or you have to completely recreate a new one with more trustworthy hashes, in which case why not just use better hashes in your original tree?