In general, a VM for my work doesn't change anything. It doesn't magically keep anything backed up: I still need to commit/push regularly, and so on. If the host explodes, I'm still down, even if what I'm doing is in a VM. I could immediately reinstall an older release and get set back up, but that isn't really dogfooding for an OS. I would need to report a bug and actually get the issue resolved, which generally means running in a broken state for a while to get there.
Beyond that, I've used a VM for my day-to-day work in the past, and honestly I found it maddening. I couldn't fully utilize my computer without starving the host of resources, and there were a thousand other papercuts relating to hardware access and general instability. I try to avoid that development story these days.
As you can see, my concerns here have nothing to do with losing code or data. They relate to lost productivity and not satisfying my primary duties.