The GPLv2 requires "a medium customarily used for software interchange", not "a medium customarily used in 1989 for software interchange". Customs are the customs of the time someone is releasing the work.
Interesting choice of cropping for that quote.
If you had included the previous word, it would be blindly obvious that “on a medium“ is only talking about the transport layer, not the format of the data. So it would exclude distributing source code on tape, or even optical discs, as nobody uses those anymore. About the only medium used for source code distribution these days is “the internet”
You could potentially stretch this to excluding google drive, though google will argue that the medium is http, not google drive; But you can’t stretch this to requiring it be formatted as git.
And even if you did manage to successfully argue that, google would just ship it as one (tagged) commit per release. The history would still be missing.
I can see your point. But OTOH if providing the "preferred form of the work for making modifications" requires not squashing commits into a big mess to frustrate someone trying to make sense of the code (I'm sure the Google engineers making modifications prefer to look at individual commits!), and Google is using Git anyway to create those commits, then it seems to me like there's an argument to be made that the customary medium used to interchange a range of Git commits is Git.
But the stronger argument is that the Android build system expects everything to be in Git: https://news.ycombinator.com/item?id=49368983
What that part of the GPL does absolutely forbid is stripping out the comments from the source code, or only shipping generated source files (but not the code which generated it). And arguably, git history is much of the same thing as comments. Especially when we have IDEs that can be configured to give us easy access to blame to help us understand the code.
The fact that commit history is not inline with the source code (or even stored as human readable files) makes it a little harder to see/argue that git history could be considered to be part of the source code, and I do wonder where this argument stops? Should the contents of bug trackers and PRs be considered to be part of the source code? What about design documents?
For Pixel kernel drivers, Google is converting the source code from the preferred form of dozens of Git repositories to a massive monolithic tarball. The build system used for this code expects it to be a bunch of Git repositories and spews out errors without it. It does build the code but it isn't the build process they used to do it themselves which is non-compliance. We need to be provided with what is needed to build it in the same way they built it.