First, direnv (along with nix-direnv) is really the glue that makes all of this work seamlessly. It depends on what the dotfiles are for and how they're used.

First, direnv (along with nix-direnv) is really the glue that makes all of this work seamlessly. It depends on what the dotfiles are for and how they're used. Here's an example of a problematic one: AWS configs. You can theoretically override the default location of these files with environment variables, but a lot of tooling doesn't respect this and will break as a result. I often deal with a large number of AWS accounts, so my solution is to have one main way for populating AWS config files that lives outside of projects, and then, because I have a rubric for account/role assignment naming, I can select the correct account/role for each project, and I can even have projects that switch them based on specific code/deployments.