The comment to whitch Linus respond reports that there are 40 constants in many places in the git code. The bit size of a SHA1 hash is 160 bits which holds in 20 bytes. In hexadecimal, the length is 40chars. So the problem reported in the initial comment was the text length, not the bit length.

Of course there is probably 20 hardcoded in many places too. So in this case the bit length is an issue too. You are right. Switching to base64 encoding would not solve the hardcoded bit length if any.

Using file hashes as file identifier doesn't look like a good idea as suggested here https://valerieaurora.org/hash.html because hash lifetime are short. The system should support changing the hash every year. The work required to compute hashes increases too.