That particular commit mentions _filenames_. I agree you should _never_ touch the bytes that are meant to be a filepath. file systems still do idiosyncratic things with non-ascii file paths, and most of us aren't filesystem experts. Leave the bytes of a filepath alone.
Since git is all about filepaths, it makes sense that git would want to generally avoid this.
But in general, "during presentation" is not enough to deal with the sorts of problems the OP talks about. If you're comparing strings somewhere, it's probably before "presentation".
In general, I think it's quite reasonable to normalize your input, on the way in, to NFC. I think it's reasonable enough in most cases that normalizing input to NFC on the way in is a reasonable "default" to get started with, unless you know a reason you shouldn't.
(For searching, you MIGHT want to normalize to NFKC, but that is "lossy" so I would never do that as a rule. I'd normally do it in some other field, and keep the original lossless copy too).