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Not sure about best practice, but we have multiple config YAML files in the same repo. They move up with everything else.

What does move up mean exactly?

There's a concept called a stack, which would roughly be an environment (dev/stage/prod). You do a pulumi select to change which "environment" you'd be working on.

I am guessing people in some cases don't put a whole logical env into one stack, to decrease the blast radius of things going wrong, or to mimic some sort of organisation structure like one team owns network, one owns permissions, etc.?

Typically when a logical environment is broken down into multiple stacks, CD is driven independently for each layer, and automation at the CI/CD layer is used to manage the (hopefully somewhat rare) tasks that require coordinated changes across layers. The StackReference construct can be used to reference outputs of other stacks from higher-level stacks, which can be used to tie parts of the environment together.

Oh wow, that is super helpful. That definitely would have been a more appropriate first start over Slack, apologies. Thanks for the help, will have a read.