Steps to repro:

Start with a directory having both .Git and CVS sub-directories.
Emacs -Q
(setq vc-handled-backends '(Git CVS))
(vc-dir)
Observe `vc-dir’ incorrectly uses the CVS backend rather than Git.
Open one of the vc-managed files and the Git backend is (correctly) chosen.
This used to work fine in emacs < 28.
This issue was masked in 28.1 by bug#54935 forcing me to choose the backend manually.

Thanks,
Mike

In GNU Emacs 28.2 (build 1, aarch64-apple-darwin21.1.0, NS appkit-2113.00 Version 12.0.1 (Build 21A559))
 of 2022-09-12 built on armbob.lan
Windowing system distributor 'Apple', version 10.3.2113
System Description:  macOS 12.6

Configured using:
 'configure --with-ns '--enable-locallisppath=/Library/Application
 Support/Emacs/${version}/site-lisp:/Library/Application
 Support/Emacs/site-lisp' --with-modules'

Configured features:
ACL GMP GNUTLS JSON LIBXML2 MODULES NOTIFY KQUEUE NS PDUMPER THREADS
TOOLKIT_SCROLL_BARS ZLIB

Important settings:
  value of $LANG: en_GB.UTF-8
  locale-coding-system: utf-8-unix

Major mode: Lisp Interaction

Minor modes in effect:
  tooltip-mode: t
  global-eldoc-mode: t
  eldoc-mode: t
  show-paren-mode: t
  electric-indent-mode: t
  mouse-wheel-mode: t
  tool-bar-mode: t
  menu-bar-mode: t
  file-name-shadow-mode: t
  global-font-lock-mode: t
  font-lock-mode: t
  blink-cursor-mode: t
  auto-composition-mode: t
  auto-encryption-mode: t
  auto-compression-mode: t
  line-number-mode: t
  indent-tabs-mode: t
  transient-mark-mode: t

Load-path shadows:
None found.

Features:
(cl-print help-fns radix-tree help-mode pp shadow sort mail-extr
emacsbug message rmc puny dired dired-loaddefs rfc822 mml mml-sec epa
derived epg rfc6068 epg-config gnus-util rmail rmail-loaddefs
auth-source cl-seq eieio eieio-core cl-macs eieio-loaddefs
password-cache json map text-property-search time-date subr-x mm-decode
mm-bodies mm-encode mail-parse rfc2231 mailabbrev gmm-utils mailheader
sendmail rfc2047 rfc2045 ietf-drums mm-util mail-prsvr mail-utils vc-mtn
vc-hg vc-git diff-mode easy-mmode vc-bzr vc-src vc-sccs vc-svn vc-cvs
vc-rcs vc-dir seq byte-opt gv bytecomp byte-compile cconv ewoc vc
cl-loaddefs cl-lib vc-dispatcher iso-transl tooltip eldoc paren electric
uniquify ediff-hook vc-hooks lisp-float-type elisp-mode mwheel
term/ns-win ns-win ucs-normalize mule-util term/common-win tool-bar dnd
fontset image regexp-opt fringe tabulated-list replace newcomment
text-mode lisp-mode prog-mode register page tab-bar menu-bar rfn-eshadow
isearch easymenu timer select scroll-bar mouse jit-lock font-lock syntax
font-core term/tty-colors frame minibuffer cl-generic cham georgian
utf-8-lang misc-lang vietnamese tibetan thai tai-viet lao korean
japanese eucjp-ms cp51932 hebrew greek romanian slovak czech european
ethiopic indian cyrillic chinese composite emoji-zwj charscript charprop
case-table epa-hook jka-cmpr-hook help simple abbrev obarray
cl-preloaded nadvice button loaddefs faces cus-face macroexp files
window text-properties overlay sha1 md5 base64 format env code-pages
mule custom widget hashtable-print-readable backquote threads kqueue
cocoa ns multi-tty make-network-process emacs)

Memory information:
((conses 16 71262 11169)
 (symbols 48 8211 8)
 (strings 32 25210 2287)
 (string-bytes 1 793971)
 (vectors 16 17356)
 (vector-slots 8 226555 21748)
 (floats 8 30 67)
 (intervals 56 839 0)
 (buffers 992 17))