It protects the company against rogue employees (not even strictly malicious, but also curious employees who want to see more than they should). It limits exposure if an employee's account gets hacked (my pet theory for this Twitch hack). And if something does go wrong, logs help track down the issue/leak.
And at the end of the day, there should be a lightweight way to request access. Many times I've seen people request access that they didn't actually need. And most other times they have access pretty quickly.
And you can try to prevent them from accessing live/real customer data, but the cost is that they will never be able to debug issues in production. Most companies, even very large ones, are just not able to pay that cost. Not to mention that once you have access to the codebase there are a million ways to leak customer data anyway -- it is a lost battle.
For the rest of the stuff, there's a sliding scale. In no universe does your average twitch developer need raw access to password hashes, for example.
This is just a guess but I wouldn't be surprised if companies have to start taking stricter precautions with their security in a WFH world.
The issue that building these systems accurately so they are NOT a constant annoyance is difficult, expensive, and takes a large team to support well.
If someone who doesn't have a business need to upload lots of traffic begins uploading large amounts of data, you may ask questions. Maybe you kick off a scripted playbook that then checks for increased logins to other privileged systems, or for large transfers of data from internal sources to the user's desktop.
Anything else is found quickly. I certainly wouldn't even dream of someone extracting the repo.
And if it's a remote FB/VNC connection, what is preventing you from just recording the screen? Not really hard...
Most companies I've seen could see all their code extracted with one malformed NFS packet. These are "air gapped" systems holding the type of industrial secrets that we don't want to leak to china. Practically the only real line of defense they have is employee screening, which does not really stop the lone man guy.