What you are missing is the difference between gits object model (with loose objects) and packfiles. The delta compression happens when you run `git gc` (git does this automatically as well on occasion), and packfiles is how git fetches and pushes history.

But when you create a new commit, that commit object is stored as a loose object, with any new file blobs and tree objects. This represents a complete snapshot of your working tree.

But git does not need to make a complete copy of the working tree on each commit. Because objects are referred to by the hash of their contents (with a git specific header), git only needs to store each version of a file once.