See https://github.com/1tgr/xargo-barebones for reference. This repo is a minimal Xargo-based project, with its own std.

Initial xargo build under 'app' works fine.

If you modify libstd/src/lib.rs, then xargo build under 'app' should attempt to recompile 'libstd' followed by 'app'. Instead it does no work and returns straight away. This is clearer if you put invalid syntax in libstd; everything should be rebuilt and fail with an obvious compiler error, but instead it looks like everything worked.