1. Git users all transition to SHA-256 while git hosts stay on SHA-1.
2. Once almost all Git users are on SHA-256, Git hosts flip a switch and convert all hosted repos to SHA-256. Git users on SHA-256 don't notice anything, because the only thing that changes is how the client and server negotiate which objects to send.
3. Git hosts disable SHA-1 support. Git users on ancient clients need to upgrade or switch hosts.
Instead, by the author's account, Git hosts are deciding to convert repos to SHA-256 individually and placing the decision of when to do each conversion upon their users, who may not be informed about the situation. To me, that seems like the wrong decision, but then I don't run a Git hosting service.
No doubt other tools will take some time to catch up too. For example, libgit2 is perhaps the most popular third-party Git client, and it still doesn't support newer Git features like reftables (circa 2020). Though libgit2 does appear to implement SHA-256.