> Backing up untracked/modified files in a bit repo?

This. It's best to do this in an atomic operation, such as a VSS style snapshot that then is consistent and done with no or paused operations on the files. Something like a zip is generally better because it takes less time on the file system than the upload process typically takes.

I see what you mean, but isn't this an issue with any filesystem backup tool? Or is there something about untracked files in a git workspace that is different, that I'm not seeing?