> restic/borg is not a backup application because you backup to a folder in the same directory called `.git`... doesn't sound right does it?

It does sound right.

Obviously the world isn't black and white, and whether something is a backup depends on what threats you are backing up against. Backing up in case of disk failure looks different then if you want your backup to survive a nuclear war.

But ultimately yes, if you configure restic/borg to backup to a different directory on the same disk (and not even different access control), that is not a backup.