but in this case, is the issue that the code being built into pexes may not live under the path where pants is installed?

Yes, that's the issue afaict. That issue is solved if the build root sentinel in different from the pants executable. Seems like

pants.ini

is the natural choice in that case? IE: pretend heron-pants does not exist, but installing pants system wide does exist as a concept. In that world, having

pants

at the root of the repo be the sentinel is confusing since

pants

would already be a binary on the PATH.