> I've worked around it so far by just ignoring `Activate.ps1` completely and setting up PATH, PYTHONHOME, and PYTHONPATH instead

This sounds like the right approach. Though if you're genuinely embedding Python in your application you should consider just including a copy of the runtime that you can fully control.

> this tells me that `Activate.ps1` probably needs some consideration for other use cases. The layout certainly seems wrong for auto-discovery at least.

Activate.ps1 only has one use case: to activate a virtual environment created with -m venv against a regular installation. Once you're customising the base install, you can use a python._pth file [1], a regular .pth file [2], or environment variables, but the venv tool isn't really for that case.

1: https://docs.python.org/3/using/windows.html#finding-modules
2: https://docs.python.org/3/library/site.html