>>>>> As an aside, it doesn't seem good that whether or not step four prompts
>>>>> you for a directory depends on whether the current buffer happens to be
>>>>> visiting a file or not.  Can we improve that, or is it inherent to the
>>>>> design of the new feature?
>>>> This was improved recently in bug#67145, so now you can set
>>>> 'vc-deduce-backend-nonvc-modes' to nil to avoid this prompt.
>>>> I'm not sure if nil should be the default value.
>>> I wonder if the "deduce in all modes" value should be t rather than nil.
>> Good idea since nil could be used to disable deduction completely.
>> Then maybe it should be defcustom?
>
> Why not.

Maybe something like this: