I don't think the reason Restic won't support compression is because of some security concerns (Restic encrypts blobs separately, and you'd compress things blob

I don't think the reason Restic won't support compression is because of some security concerns (Restic encrypts blobs separately, and you'd compress things blob-wise as well), but because there simply wasn't any space designed into their file formats to signal compression, so it's essentially impossible to implement it without breaking compatibility. Borg's story is actually similar but the opposite. Attic only used to support zlib, other methods were added later. This was possible because the zlib header uses only a few values for the first two bytes, so there is enough room to indicate various compression formats.