The government cloud regions are way more about meeting compliance with all levels of FedRAMP and DoD requirements. Such as exclusively only US Citizens may access the systems even on the cloud hosts staff (so no foreign/remote/visa employees) and a whole list of other requirements both big, small and annoying (like FIPS) that affects everything from software to the physical building.
That said, as you note yourself, the government is perfectly fine w/ not controlling the servers. GitLab could offer single-tenant (or heck, even multi-tenant) SaaS in AWS GovCloud and sell to government customers.
Gov IT leaders will move to Gitlab SaaS overnight, once it's FedRAMP approved and migration is enabled through a click of a button.
Maybe less favorable for AWS and their contracts oriented to long-term gov owned compute.
If they aren't committed to it they are certainly investing a lot of time into doing it well.