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What was the thought behind this change?

If you read the commit message you would see that it is up drop a third party dependency.

Yeah, read that. Just don't understand, if git already had an internal gzip implementation, why wasn't it used since it was added?

Because not everyone refactors whole codebase after adding one function that might be useful somewhere else.

I'd imagine motivation for this change in particular is multiplatform use, not every platform just have gzip in path.

They could just produce tar output and compress that using system gzip. The “git archive” tool supports many output formats.