git includeIf config wont get applied

Here is an issue that was fixed of someone who had this issue a long time ago: https://github.com/Microsoft/vscode-remote-release/issues/5312

• VS Code Version: tested with stable and insiders (as remote). It works, if I use the vscodium fork directly in WSL or on my real Linux machine.
• Local OS Version: Win11
• Remote OS Version: NixOS-WSL and alpine linux wsl
• Remote Extension/Connection Type: Dev Containers/WSL/Remote - Tunnels/VS Code Server

Steps to Reproduce:

mkdir vscodeGithooksBug
cd vscodeGithooksBug
echo "" >> ~/.gitconfig
echo "[includeIf \"gitdir:$(pwd)/\"]" >> ~/.gitconfig
echo "    path = $(pwd)/.gitconfig" >> ~/.gitconfig
echo "[core]" >> .gitconfig
echo "hooksPath = $(pwd)" >> .gitconfig
echo "#!/usr/bin/env sh" >> prepare-commit-msg
echo 'echo "HookTitle - $(cat $1)" > $1' >> prepare-commit-msg
chmod +x prepare-commit-msg
git init
echo test > test.txt
git add . && git commit -m "test via git CLI"
git log
echo testVScode > test.txt
code .

Then try to commit via vscode.

I think a few VSCode versions ago, like one or two month ago it worked, but since two weeks it doesnt.

Does this issue occur when you try this locally?: No
Does this issue occur when you try this locally and all extensions are disabled?: No

I would love to help you more and contribute fixes, but unfortunately this is closed-source :(