Where do library customization data extension YAML files go, and how can we actually develop and use them?

The documentation for library customisation / data extensions describes the structure of the YAML files, but I cannot see any documentation on where these files should be placed, or how they can be invoked (or debugged) using CodeQL CLI or the vscode extension.

Some of the documentation implies that these YAML files are intended to be built into query packs and are loaded that way, but I didn't see any examples on how this is actually done in practice, nor any that explained how to develop and test the extensions before packing them.

Could someone provide some insight into this, and potentially update the documentation to include an example of a practical development flow using this feature? I know this feature is in beta, so the docs aren't 100% there yet, but a practical example would go a long way towards getting folks hands-on with it. Thanks.

Start with the existing library customization and data extension documentation, then trace the query pack guidance and the CodeQL CLI and VS Code workflows mentioned in the issue. Add a practical example covering file placement, development, testing, invocation, and debugging; done means a newcomer can follow the flow before and after packing the extension.

Written by the indexing model from the issue text.