Each directory is a test case that contains BUILD.in and BUILD.out files for assertion. BUILD.in is used as how the build file looks before running Gazelle, and BUILD.out how the build file should look like after running Gazelle.
Each test case is a Bazel workspace and Gazelle will run with its working directory set to the root of this workspace, though, the test runner will find test.yaml files and use them to determine the directory Gazelle should use for each inner Python project. The test.yaml file is a manifest for the test - check for the existing ones for examples.