ensure setup.py editable builds do not use pep517

Prior to this change when Poetry builds a project with a setup.py file,
as in the case when `generate-setup-file` was set to true, `pip`
fallback was invoked with a PEP 517 isolated build causing it to fail.

This was a regression in functionality from Poetry 1.1 build script
usage. However, note that build script usage is an experimental
feature.

src/poetry/utils/pip.py

@@ -31,7 +31,7 @@ def pip_install(
     # lot of packages.
     args = ["install", "--disable-pip-version-check", "--prefix", str(environment.path)]
 
-    if not is_wheel:
+    if not is_wheel and not editable:
         args.insert(1, "--use-pep517")
 
     if upgrade:

tests/fixtures/extended_project/build.py

@@ -0,0 +1,12 @@
+from __future__ import annotations
+
+from pathlib import Path
+from typing import Any
+
+
+def build(setup_kwargs: dict[str, Any]):
+    assert setup_kwargs["name"] == "extended-project"
+    assert setup_kwargs["version"] == "1.2.3"
+
+    dynamic_module = Path(__file__).parent / "extended_project" / "built.py"
+    dynamic_module.write_text("# Generated by build.py")

tests/fixtures/extended_project/pyproject.toml

@@ -20,8 +20,10 @@ classifiers = [
     "Topic :: Software Development :: Libraries :: Python Modules"
 ]
 
-build = "build.py"
+[tool.poetry.build]
+script = "build.py"
+generate-setup-file = true
 
 # Requirements
 [tool.poetry.dependencies]
-python = "~2.7 || ^3.4"
+python = "^3.7"

tests/masonry/builders/test_editable_builder.py

@@ -12,9 +12,12 @@
 
 from poetry.factory import Factory
 from poetry.masonry.builders.editable import EditableBuilder
+from poetry.repositories.installed_repository import InstalledRepository
+from poetry.utils.env import EnvCommandError
 from poetry.utils.env import EnvManager
 from poetry.utils.env import MockEnv
 from poetry.utils.env import VirtualEnv
+from poetry.utils.env import ephemeral_environment
 
 
 if TYPE_CHECKING:
@@ -203,6 +206,41 @@ def test_builder_falls_back_on_setup_and_pip_for_packages_with_build_scripts(
     assert [] == env.executed
 
 
+def test_builder_setup_generation_runs_with_pip_editable(tmp_dir: str):
+    # create an isolated copy of the project
+    fixture = Path(__file__).parent.parent.parent / "fixtures" / "extended_project"
+    extended_project = Path(tmp_dir) / "extended_project"
+
+    shutil.copytree(fixture, extended_project)
+    assert extended_project.exists()
+
+    poetry = Factory().create_poetry(extended_project)
+
+    # we need a venv with setuptools since we are verifying setup.py builds
+    with ephemeral_environment(flags={"no-setuptools": False}) as venv:
+        builder = EditableBuilder(poetry, venv, NullIO())
+        builder.build()
+
+        # is the package installed?
+        repository = InstalledRepository.load(venv)
+        assert repository.package("extended-project", "1.2.3")
+
+        # check for the module built by build.py
+        try:
+            output = venv.run_python_script(
+                "from extended_project import built; print(built.__file__)"
+            ).strip()
+        except EnvCommandError:
+            pytest.fail("Unable to import built module")
+        else:
+            built_py = Path(output).resolve()
+
+        expected = extended_project / "extended_project" / "built.py"
+
+        # ensure the package was installed as editable
+        assert built_py == expected.resolve()
+
+
 def test_builder_installs_proper_files_when_packages_configured(
     project_with_include: Poetry, tmp_venv: VirtualEnv
 ):