Sqlite as an application file format is great [1], but for a knowledge base / note taking app the benefits are not worth the tradeoffs in my opinion.
Sqlite is more performant more performant and provides lots of built-in features. However, most note taking users do not have enough notes or files to benefit from that performance. Sqlite will also lock the user into the application, whereas a "pack of files" can be used in the shell as a text editor. Using markdown files + a open json format has the benefit of being supported by multiple applications (e.g. sometimes i open my obsidian vault in vscode), while a sqlite database would need a proprietary schema coupled with a single application
I prefer an open file format that isn't tied to a vendor. A "data bridge" might handle syncing and diffing more efficiently than plain files, but it is still tied to the vendor. For example, I prefer not to pay for Obsidian Sync, and I'm able to use a git plugin and storing my files on nextcloud to sync between my devices. This leverages existing tech without having to implement features from the ground up