I've love to see this for open source, especially integrated into GitHub. A simple "click here to contribute" button could really lower the barrier to entry for first-timers.
Not sure if Git is fully integrated in there (although, it being based on VSCode, it should).
The "remote repository" experience on VSCode.dev is a little more involved than just "fully integrated git" (it relies on the GitHub/Azure Repos APIs and existing VS Code extensions with Remoting support for some of it beyond just what raw git can provied), but they say in this article that it is extendable and they can and hope to add other providers in the future.