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This could be illegal for git repos that do not have a open source license that allows mirroring or copying (BSD, Apache, Mit, GPL, etc.) Sometimes these repos are more “source available” and the source is only allowed to be read, not redistributed or modified. I would say that this is more of a matter for each individual copyright holder, not Microsoft.
But ultimately I agree, this really isn’t as big of a deal as people are making.
edit: changed some wording to be clearer
China is a soverign state and they should make their own laws. However, China has promised repeatably that they will take IP concerns more strictly (trade deal with Trump in 2020 is one example of this promise). It seems of this moment they still use the World Intellectual Property Organization for inspiration for their IP laws. At one point, China did not acknowledge IP rights at all but chose to acknowledge them in order to secure foreign business trade. Being consistent is good for business; especially when it comes to international business.