Took a careful pass (also in the context of #807, which this pairs with). The external-artifact feature is gated cleanly behind unset env vars, so the default path is unaffected. Two things I'd want to resolve before merge, plus a minor:

1. Session reuse treats every external session as stale. resolveReusableRunnerSession (runner-session.ts:265-284) computes expectedDerived = resolveRunnerDerivedPath(...) (the cache-convention path) and tears the session down if it doesn't equal existing.xctestrunArtifact.derived. For cache === 'external', derived is the external/configured path, which never matches → the runner is torn down and relaunched on every command. This wasn't updated alongside the markRunnerXctestrunArtifactBadForRun guard. It also defeats prewarm in external mode (the just-warmed session is discarded on the first real command). Suggest short-circuiting this check for external, mirroring the bad-artifact guard.

2. Relocating the env overlay may break __TESTROOT__. prepareXctestrunWithEnv now writes the overlay .xctestrun into AGENT_DEVICE_IOS_XCTEST_ENV_DIR, a different dir than the source. If the external xctestrun uses __TESTROOT__-relative TestBundlePath/TestHostPath (xcodebuild's default), __TESTROOT__ resolves relative to the overlay's location → wrong bundle paths. This presumably works because the AWS-produced xctestrun uses absolute paths — worth a comment documenting that assumption, or rewriting __TESTROOT__ to the original dir.

3. (minor) Default derived may be read-only. When AGENT_DEVICE_IOS_XCTEST_DERIVED_DATA_PATH is unset, derived defaults to path.dirname(xctestrunPath) — on AWS that's the read-only artifact mount, now passed as -derivedDataPath where xcodebuild writes logs/results. The override exists, but the default invites a confusing failure; consider defaulting to a temp dir.

Nice test coverage on the new functions otherwise. (1) is the one I'd really like confirmed given you're targeting device farms + prewarm.

Generated by Claude Code

btw, instead of using env vars we could reuse our config mechanism and add new keys (e.g. iosXctestrunFile, iosXctestDerivedDataPath, iosXctestEnvDir). We'll keep the env-var ergonomics device farms want (the daemon reads them in-process), and also get config-file support, a typed/validated surface, auto-generated AGENT_DEVICE_* names, and docs, and it stays consistent with how every other setting in the tool is plumbed.

#807 can stay as an env var because it realistically can't be anything else.