I don’t know for certain but I feel like this could allow something like 1. Takeover/inherit public repo with lots of stars 2. Take repo private (retaining stars) 3. Replace repo code with some malicious/offensive code. 4. Take repo public again 5. Inherit the trust/prestige of the old repo.
Yeah, that's a risk. They could mitigate it by allowing you to revert all branches/tags back to the pre-private state, but we're getting more and more complicated here.
stars absolutely are seen as an endorsement. I'm guilty of that for sure, and I've been in a ton of conversations about adopting some thing and the "number of stars" is often a consideration unless it's a project like React or Vue, etc.
Would you really not look at two repos that do the same thing, with similar ages and recent commits but one has zero stars and the other has hundreds, and not at least initially trust the latter more?