Oh, you're not talking about him dismissing news of practical attacks as a direct threat, you're talking about him being dismissive very early on about the idea that he was doing a bad job of picking a hash.

Yeah, okay, he was wrong to be dismissive there.

From the threat it looks like Linus' threat model for git is simply different from the common use today. Of course a judgement under a different threat model would make it seem like a bad tradeoff!