PM for Git at Microsoft here. We explored splitting it up. It's a 300GB repository and it's been a monorepo for the last 20 years. Splitting it up logically would take a lot of time (to put it mildly) and development would stall while we did it. And once we did, we would have 100 3.5GB repositories? 3500 100MB repositories? Neither of these are particularly appealing and getting changes checked in atomically across multiple repositories is insanely challenging. There's no doubt that we would need to build tooling to make this work for us. (We did actually explore this direction, but ultimately decided that it would be too much work for too poor an experience.)
Instead, we decided to - as you put it - change Git to fit our needs.