I think you've got it. The version of basetools will be carried via a pip-requirements file. 

Where would "pip install -r pip-requirements.txt" *fetch* the required basetools version from?
I believe that it has a cache internal to pip. But if you want to fetch a basetools that hasn't been fetched before, yes, it would require a network download. Alternatively, if you're without internet access, you can check it out locally and use the pip install -e.

Can you please explain the effects of the "pip install -e in more detail?
So I'm a little murky on how it works but I believe that it creates symlinks or some other mechanism to repoint the global python module (global meaning your pip install or virtualenv). This is something that works automatically. The setup.py in the root of the repo takes care of this since it's used also to package the pip module. You can do pip install -e., and it just works (tm). Any basetools commit you check out (once it is in it's own repo, going back a given basetools commit two years ago is unfortunately not as easy) will work with pip install -e with not setup or configuration on your part as a developer. I use this whenever I work on the pytools and it works quite well. It will also show up in the BuildToolsReport and pip freeze as being locally installed and it will tell you the git commit it is currently at. 

I agree- I think we're trending towards very very frequent releases for basetools to provide high granularity. But that is pending community feedback and the decision of the tools maintainer. It is certainly trivial to automate the release pipeline in such a way that a release with every commit that passes CI is easy and mostly automatic for the maintainers.

Thank you for the excellent questions!

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- Matthew Carlson