To work on the clipper, you can also run npm run watch so that it recompiles as soon as you change a file. You’ll still need to reload the extension in the browser though.
The directory to select is indeed joplin/Clipper/joplin-webclipper.
As far as I know the manifests are built during the release-cli.js script, so how is someone supposed to run a dev version of the clipper?
And as @devonzuegel mentioned a no valid manifest error happens when trying to use the directory directly.
The release-cli.js script can be used, but it creates a local tag, which messes up your local working directory/git. It also commits and pushes the changes to the remote, which of course will fail, if one does not have write access to the repo. This is fine, but you still have a mess in your local working dir.
So how do you create a dev version of the clipper that you can run for testing?
For development you can load the extension directly from the directory. What was missing I think for @devonzuegel is that the popup view wasn't built but you've provided the instructions to do that.