One issue with this approach is that it seems git-pack-index doesn't perform as well with thin packs. git-index-pack uses a multi-threaded approach to resolving the deltas. However, the multithreading only works on deltas that are exclusively in the pack. After the multi-threaded phase, it incrementally brings in objects from external packs, but in single threaded manner. Many objects in the pack have some dependency on an external object, therefore, defeating the multithreading.
What's the use case for a pack file with a SHA1 reference living inside the pack file (why not just use an offset?) Would it make sense to assume that all such files are external and bring them in in the first phase.