Hi @sbidoul, sorry for the delay in getting back to this topic.
After some discussion about the topic, I have implemented a compat mode that is meant as a temporary workaround during the transition period, so people have time to adapt to the changes. I am currently considering a period of 6 months, after which I would like to remove this compat mode.
The compat mode will try to emulate the behaviour of the existing develop command (i.e. use a static .pth file).
I have also updated the docs with a more detailed list of limitations and a brief summary of how the editable installation is performed:
https://setuptools--3485.org.readthedocs.build/en/3485/userguide/development_mode.html
I hope this is useful.