Is it practical to use Git on system disk as a replacement to Windows' System Restore?

No. Git is not a backup tool, especially not for system backup.

You may use it as backup for the usual data stuff (I do in some cases), but I would never rely on it for system level stuff. There is more to think about, like user rights, what can be accessed while system is running, etc.

Possible. But not really practical because it's not designed to act like one. Git doesn't store the file permissions, owners and groups.. Not really sure about some other caveats.

There's one backup tool based on git called "bup", I haven't tried it though.

How bout, fuck no.