I don't recognize this. I use poetry all the time, without setup.py and the local installs are editable. I have published half a dozen packages which don't have a setup.py and they all work fine.
You can't install a poetry package editably into another environment. It's really a missing feature in the pyproject spec. There's an open issue about it under one of the pypa repos. Someone just needs to do the work of implementing it in pip/setuptools.
