It is not "custom embedded tooling"! It is tooling you run on your main machine to build a custom distro. Imagine you follow the "Linux from Scratch" tutorial,

It is not "custom embedded tooling"! It is tooling you run on your main machine to build a custom distro. Imagine you follow the "Linux from Scratch" tutorial, then start writing scripts to automate parts of that, and eventually create a framework that allows you to create a custom Linux from Scratch. After years of work you may end up with something that looks like Yocto. The whole point of using Yocto is that you want a custom distro. You could build a totally "standard" distro with Yocto but... at this point you can also just use Gentoo or Debian or whatever works.