OK, this was because I had a .pydistutils.cfg file containing the
following (ironically, put there following somebody's recipe for
installing setuptools packages using stow):

[install]
install_lib=~/lib/python$py_version_short/site-packages
install_scripts=~/bin
 
[easy_install]
site_dirs=~/lib/python$py_version_short/site-packages

Removing that file, make install no longer tries to install files
outside of the directory passed to --prefix

So this bug is not valid, and I don't think there's any regression.

There's probably another bug about making it awkward to invent a
consistent way of installing Python software using tools like stow, but
I'm not sure whether that bug lies with Python or with setuptools, or both.