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I see Talos only supports XFS, what potential reasons could they have to prefer XFS to competitors?

I've always struggled to compare filesystems fairly. My justification for ext4 is just that everybody else uses it :)

Mongo and Elasticsearch also recommend using XFS. So Talos isn't unique in this. XFS is somewhat more often preferred in data intensive systems.

xfs is technically more robust and performant than ext4, ext4's just the most widely supported, but most use xfs when available