Hi @mpelletier
The directory you are referring to is your project directory, this is where the state tool will place the activestate.yaml file. It uses this file to source your project information as well as to allow you to customize how your project works.
When you “activate” your project (eg. by running state activate) it will download your runtime files to a local cache directory and sets up your current environment to work with those runtime files. You can find out the location of those files by running eg. which python3, but for the most part you shouldn’t need to care about this.
The idea is that you concern yourself with your code whilst we concern ourselves with setting up runtime dependencies that your code might need.