Hmm, so this is a case where a Git repository, with all its commit history, is the final product. Would it be feasible to develop this product within a different Git repository? How would one best do that? Is such a repository also available on GitHub?

That's how the Unix History Repository was built, at least (a really cool project that reconstructed a synthetic git commit history for Unix from the initial Bell Labs source onward):

https://github.com/dspinellis/unix-history-make (a repo with the scripts to build the final repo)

https://github.com/dspinellis/unix-history-repo (the final repo -- check out all of the different branches/tags)