I came into this after trying to translate an --add-file to an --add-virtual-file and being surprised that the prefix wasn't applied. anything else you add, in the repo or not, it gets the prefix. I can go back and explicitly add the prefix, but it makes the options less naturally composable in my opinion. The specific case was packaging some software that uses git metadata to set version and some other things when in a repo, and files in a tarball. The tarball's prefix is set in one part of the packaging code, files and exclusions in another, and passing that through was something we didn't have to think about using add-file, but do with add-virtual-file.
That said, it sounds like both you and Junio prefer updating the docs rather than the code, which makes me think I'm in the minority in that opinion. If that's the case, I can certainly update the docs, and I imagine we can backport that easily wherever it makes sense. I would really like to have the option to have the prefix apply though, either adding a new flag or an option to the existing one that would be invalid given current syntax or similar to provide the option.