This is fairly broken - it doesn't handle platlib vs purelib (see pip PR 3450), doesn't handle data files, or any other layout. Donald says pip uses it to maintain the _vendor subtrees only, which doesn't seem like a particularly strong use case.
Certainly the help description for it is misleading - since what we're actually doing is copying only a subset of what the package installed - so at a minimum we need to be much clearer about what it does.
But, I think it would be better to deprecate it and remove it... so I'm pinging here to see if anyone can explain a sensible use case for it in the context of pip :)
-Rob