One can safely assume they will find a way to follow the law rather than mumble about technically this is working as intended.

> One can safely assume

With something as nuance as this, I wouldn't safely assume all processes, especially one from a compliance (none-technical) department account for it.

I've seen bots make that kind of PR spam a few times. They'll make a PR that adds a random HTML or markdown file or whatever containing gambling spam or whatever and then presumably post links to github.com/$yourorg/$yourrepo/blob/$sha/thatfile I can't link an example because all the ones I know about were nuked by GH Support.

That looks like the kind of loophole that could get GH to do something about this.

they have the ability to do essentially git gc and drop unreachable commits

It can be used to make it look like another project posted the content (though there is a warning: "This commit does not belong to any branch on this repository, and may belong to a fork outside of the repository.").

You can't host anything this way that you can't already host in your own repository, and GitHub does have a way to remove content that will make it inaccessible, whether in your repository or through another.

I think something like this was done when the takedown of yt-dl happened

>Can this be used to host illegal content?

It already is. Even to github org's own repos. Any time you make a PR, the /tree/ link to it stays valid forever, even if the repo author removes it.