I think there are two time frames to look at here:

1. How do we make it easier for folks to work with existing packages like the newrelic one?

For that, it may make sense for at least setuptools to override extra_path when using installation targets other then sysconfig.get_path("purelib") and sysconfig.get_path("platlib") such that they get the same result as if "extra_path" wasn't there.

We know the setting isn't going to work, so ignoring it actually seems like it may be the more user friendly option.

2. How do we persuade publishers to stop using the "extra_path" feature in the first place?

I'm less sure of the benefits of that step, as I'm not sure why anyone would choose to use extra_path in the first place - the common "*.pth" file means you can still get conflicts, even with a versioned path name, and if you keep the dist-into directory, --single-version-externally-managed already gives you version info directly in the filesystem.

The use case does seem obscure enough that we could deprecate it as an undocumented feature that is incompatible with non-site-packages installs, and then see if anyone objects to the deprecation.