I recently developed a plugin for "internal" use (repo). This is what I did:
* I created a Docker workspace for anything Moodle related (repo). I made the image tailored for my use case (very low disk space required).
* I used a bind mount to mount my plugin repo (inside the extras) folder into the docker container.
* I used a bind mount to mount my plugin repo (inside the extras) folder into the docker container.
I'm not sure if this is an ideal way of doing things but I realized using submodules made things needlessly complicated for me. I could just cd into a sub repo and use it as normal. The contents 'extras' folder and the 'moodle' folder in the main Docker repo is completely ignored and hence there isn't much issue.
The plugin I'm working on is extremely simple and there isn't much chance of needless complicated. Though, I don't see why this solution wouldn't scale for bigger plugins. Hopefully this is of some use to you.