Seems like Microsoft is trying to brand a cached proxy for Git...? This would make more sense as a paid service for those that need it. Possibly, a local appliance that a company would host internally. What am I missing...?
It defines a "CDN protocol" for downloading those objects as needed (which Bitbucket and GitHub are both supporting in various alpha/beta stages), which is essentially a cache offered as a paid service to big enterprise projects, but the GVFS project also has to make sure that git operates as efficiently as possible with sparse object databases, and implements how those sparse object databases work at all (which to this point was not something git concerned itself with, and partly why the work is being done as a filesystem proxy using placeholder files on the user's machine).
The project has included work in making sure that git commands touch as few objects from the object database as they can to get their work done (minimizing downloads from a remote server).