One of the fake recruiters contacted me on LikedIN for a Solidity dev role, with an assignment repo that came as a zip in DM. Everything looked fine since Finder only showed .sol files, but Finder doesn't show .git and other hidden folders by default. However .git was there, and it had a hook that ran eval() on a remote address on commit/push.

As I read it, .git protection stops the VM from changing hooks, and --clone leaves the hook behind since a clone doesn't copy hooks. However, the hook is still in the folder on the host. Does devvm inspect and warn when a folder already has hooks before you start?

You should never extract the zip locally. You unzip it in the VM.