There is several issues depending where you run git on. For example mmap() can be problematic on large files in 32bit OS. On Cygwin it gets even worse.

As for deduplication, I do not think so. If you have single blob, lets say 1GB and you change just 1B, whole blob changes and no more dedup. If you use basic method of static block size, lets say 512KB, this will work much better. Futher, there are more advanced techniques to handle dedups like roling checksums to carve out even smaller sub-block.