My use case here is not using pkgs.fetchgit etc - but rather when developing a package locally and rebuilding it.

Let's say I'm working on a huge monorepo locally, with GBs of code and data in it, most of which I want to ignore in my nix build. Let's say the files I actually care about are also not in a single subfolder. Then I can't just move the flake.nix to that subfolder either.